Tesla's Energy Business Was Electric, But Growth Has Slowed
The last time we looked into Tesla’s energy business — and all the other parts of Tesla that aren’t selling cars — the world looked very different. The company’s CEO was growing increasingly close to presidential candidate Donald Trump, automotive sales were still growing (if only just), and the company’s robotaxi and AI efforts were future upside, rather than the core narrative of the stock today.
A lot has changed and there was no clearer signal of that than the latest earnings report on Wednesday, marking one of Tesla’s worst quarters in over a decade: revenue fell 12% year on year in Q2, including a 16% drop in automobile revenue.
One bright spot was the the carmaker’s “services and other” business. That division includes used vehicle sales and maintenance services, but the main boost appears to be down to the continued growth of Tesla’s supercharger network, which has exploded ~7x in both the number of EV charging stations and connectors since 2018.
As Tesla opened up the network to other brands, it’s been raking in more profits from non-Tesla drivers who use the superior charging facility at a cost, per a recent customer satisfaction survey of EV drivers.
That reversal of fortunes is particularly interesting, especially when looking at Tesla’s services division side-by-side with the energy business, which includes its solar energy generation and energy storage offerings. While its energy division is humming along, making a record $846 million gross profit this quarter, it’s no longer “growing like wildfire” as it was a year ago, back when it was the fastest-growing part of the company. It actually shrunk this quarter.
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