In Q2 2024, Tesla achieved record quarterly revenues despite a difficult operating environment. The Energy Storage business continues to grow rapidly, setting a record in Q2 with 9.4 GWh of deployments. It led to record revenues and gross profits for the overall segment.
The company saw a sequential rebound in vehicle deliveries in Q2. Tesla received record regulatory credit revenues in Q2 as other OEMs are still behind on meeting emissions requirements.
The company continued to develop its AI initiatives in Q2. Tesla reduced the price of FSD (Supervised) in North America and launched free trials to everyone with the necessary hardware. These programs are laying the foundation for more meaningful FSD monetization, according to the statement. The company expects to see an increase in FSD attach rates for its fleet as the capability improves and awareness around its convenience and safety increases.
Profitability
- $1.6B GAAP operating income in Q2 after restructuring and other charges of $0.6B
- $1.5B GAAP net income in Q2
- $1.8B non-GAAP net income in Q2
Cash
- Operating cash flow of $3.6B in Q2
- Free cash flow of $1.3B in Q2 (AI infrastructure capex was $0.6B in Q2)
- $3.9B increase in Tesla’s cash and investments in Q2 to $30.7B
Operations
- Record energy storage deployment of 9.4 GWh in Q2
- Optimus began performing tasks autonomously in one of Tesla’s facilities
- Cybertruck became the best-selling EV pickup in the U.S. in Q2
Revenue
Total revenue increased 2% YoY in Q2 to $25.5B. YoY, revenue was impacted by the following items:
+ growth in the Energy Generation and Storage business
+ Cybertruck deliveries
+ higher regulatory credit revenue
+ growth in Services and Other
– reduced S/3/X/Y vehicle average selling price (ASP) (excl. FX impact), due to pricing, attractive financing options and mix
– decline in S/3/X/Y vehicle deliveries
– negative FX impact of $0.3B
Profitability
Tesla’s operating income decreased YoY to $1.6B in Q2, resulting in a 6.3% operating margin. YoY, operating income was primarily impacted by the following items:
– reduced S/3/X/Y vehicle ASP
– restructuring charges
– increase in operating expenses largely driven by AI projects
– decline in S/3/X/Y vehicle deliveries
+ higher regulatory credit revenue
+ growth in Energy Generation and Storage gross profit
+ lower cost per vehicle, including lower raw material costs, freight and duties
+ lower cost of production ramp of 4680 cells and other related charges
Cash
Quarter-end cash, cash equivalents and investments in Q2 was $30.7B. The sequential increase of $3.9B was a result of positive free cash flow of $1.3B, driven by an inventory decrease of $1.8B and partially offset by AI infrastructure capex of $0.6B in Q2.
Tesla stated, that it is currently between two major growth waves: the first one began with the global expansion of the Model 3/Y platform and it believes the next one will be initiated by advances in autonomy and the introduction of new products, including those built on its next-generation vehicle platform. In 2024, the company’s vehicle volume growth rate may be notably lower than the growth rate achieved in 2023, as its teams work on the launch of the next-generation vehicle and other products. In 2024, the growth rates of energy storage deployments and revenue in our Energy Generation and Storage business should outpace the Automotive business.
Tesla stressed, that plans for new vehicles, including more affordable models, remain on track for the start of production in the first half of 2025. These vehicles will utilize aspects of the next-generation platform as well as aspects of its current platforms and will be able to be produced on the same manufacturing lines as its current vehicle line-up. This approach will result in achieving less cost reduction than previously expected but enables the manufacturer to prudently grow its vehicle volumes in a more capex efficient manner during uncertain times. This should help Tesla fully utilize its current expected maximum capacity of close to three million vehicles, enabling more than 50% growth over 2023 production before investing in new manufacturing lines. The company noted, that its purpose-built Robotaxi product will continue to pursue a revolutionary “unboxed” manufacturing strategy
