Tesla revenue for Q2 2023 came in at $24.9 Billion and GAAP income $2.7 Billion. Revenue grew 47% yoy and income grew 20% yoy. Net free cash flow $1 B, +62% yoy. They end the quarter with healthy $23B, up 22% yoy.
Tesla has three sources of revenue. Automotive came brought in the majority at $21.2B, +46%, Energy generation and storage at $1.5B, +74%, Services and other $2.1B +47%. Growth reported are yoy.
GAAP Gross margin, taking the ratio of total revenue $24.9B over total gross profit $4.5B, came in at 18.2% a decline of 682 bp. It takes salespeople, factory workers and engineers to sell products, to operate the factories, design and enhance products respectively. These are operating expenses. This quarter it came in at $2.1B up 21%. After subtracting gross profit from operating expense, we have $2.3B of income from operations and is down 3%. Operating margin is 9.6% and is down 493bp. These declines are attributed to the massive price reductions on their vehicles. Tesla did that to help customer offset the rising cost of interest expense and to maintain demand and keep factories running.
Tesla announced they will allow customers to transfer FSD purchased in an older vehicle to a new purchase for Q3 2023 only. This has been a popular request from long time shareholders and owners because FSD price has gone from $5k to $15k.
Storage business is a bright spot. 3,653 MWh deployed up 222%. Solar declined 38% and came in at 66 MW. Tesla believe this is caused by high interest rate and is affecting solar industry overall.
4680 cell production yields improved. Production increased 80% Q1 to Q2. 10 millions cells have been produced in Texas. The Cybertruck cell is 10% more energy dense using mechanical design and process optimizations.
On AI training for FSD, Dojo started production and provides faster video processing at lower cost vs GPU solution. They anticipate their Dojo computer will be top 5 computer in the world at around the equivalent of 100k Nvidia A100 GPU by January 2024. By October 2024, they anticipate they would have equivalent of 300k A100 GPUs with 100 Exa-flops.
Cybertruck remains on schedule for delivery this year. It will have 4 doors, under 19 feet to fit in a garage and has a 6 ft bed.
On Supercharging, Ford, GM, Mercedes, Nissan, Polestar, Rivian, Volvo and Electrify America announced they will adopt Tesla NACS charging standard.