Tesla Doubles Its Gross Margin Over 7 Quarters

Tyler Mitchell
3 min readOct 23, 2020

I’m not a Tesla investor (nor a good fanboy) but I learned a lot during a recent project where I had to dig into some of their financial reports. Here’s what I learned about one of their profitability numbers, gross margin.

Thankfully, for you, this is not financial advice but observations from an amateur armchair analyst studying managerial finance. Thanks for reading!

Tesla provides a really nice, clear, shareholder presentation for each quarter. If you have not seen their summaries before, they are very accessible, e.g., see the PDF slides for Q3 2020 here. They include photos of construction projects, overviews of core technology, and more.

Even battery science geeks get a good overview of materials and how they impact range and $/kWh cost reduction:

Source: Tesla.com Q3 2020 Report — Five Areas of Focus

“This was a record quarter on many levels”

  • Strong order volume
  • Total revenue up 39% year-over-year (despite some reduced vehicle pricing changes as mix shifts toward more affordable models)
  • Strong vehicle deliveries and growth in other areas of the business
  • Operating income at record levels: $809M
  • Free cash flow of $1.4B, plus raising of $14.5B quarter-over-quarter, from successful new…



Tyler Mitchell

Tech Advisor | Product/Marketing Coach | 1MITCHELL Mgt. | Former roles: PM @Couchbase @Actian, Exec/Founder @OSGeo, Publisher @LocatePress, Author @OReillyMedia