U.S.-based electric vehicle and clean energy company Tesla‘s revenue for the second quarter (Q2) of the financial year (FY) 2024 rose 2% year-over-year (YoY) to $25.5 billion, as declining automotive sales were partially offset by booming energy storage business.

The Texas-based company reported a net income of $1.48 billion for the quarter, down 45% from $2.7 billion last year, partly because its core automotive segment, Tesla’s largest revenue source, saw a 7% decline in revenue.

Operating expenses rose 39% YoY due to investments in artificial intelligence projects and restructuring. “We are investing in many future projects, including AI training and inference and a great deal of infrastructure to support future products,” said CEO Elon Musk during an investor call.

Automotive Segment Faces Headwinds

Tesla’s automotive segment saw revenues fall 7% to $19.88 billion from  $21.27 billion last year. The company cited reduced average selling prices (ASP) for its S3XY vehicle lineup and a 5% drop in deliveries as key factors.

However, this was partially offset by Cybertruck deliveries and higher regulatory credit revenue. The company delivered 443,956 vehicles in Q2, a 5% YoY decrease even as the Cybertruck became the best-selling EV pickup in the U.S.

According to Musk, the drop in deliveries and ASP was due to competitors heavily discounting their EVs. “We don’t see this as a long-term issue,” he said.

Energy Storage Shines

In contrast to automotive, Tesla’s energy generation and storage segment doubled its revenue to $3.01 billion from $1.51 billion last year. The company achieved record deployments of 9.4 GWh in energy storage products, driving record revenues and gross profits for the segment.

“We are really demand-constrained rather than production-constrained. So we are ramping up production in our U.S. factory as well as building the Megapack factory in China that should roughly double our output, maybe more than double — maybe triple potentially,” said Musk, adding that energy storage deployments reached an all-time high in Q2 leading to record profits for the energy business.

 

First Half 2024

For the first six months of 2024, Tesla reported total revenue of $46.8 billion, down 5% from $49.3 billion in the first half of 2023. Net income for H1 2024 was $2.61 billion, a 62% decrease from $6.82 billion in H1 2023.

Lower EV sales in the previous quarter hurt Tesla’s net income by 55%, even as energy storage revenue surged.

Late last year, the company’s charging technology became the official standard in the U.S.  across public networks as the government earmarked $7.5 billion to establish a nationwide EV charging network. This has been allocated from the $1.2 trillion Bipartisan Infrastructure Law signed into effect in November 2021.