What's driving TSLA's revenue surprises in 2024?

Tesla's revenue surprises in 2024 can be attributed to several key factors:

1. **Regulatory Credit Sales**: Tesla generated significant revenue from selling automotive regulatory credits. These credits are sold to traditional automotive manufacturers struggling to meet government-mandated zero-emission vehicle sales targets. Tesla's sales of these credits, estimated to be nearly pure profit, contributed substantially to its revenue and margins.
2. **Energy Business Growth**: Tesla's energy business, encompassing energy storage products and solar energy systems, witnessed robust growth. In Q3, energy revenue surged by 52% to $2.38 billion, driven by strong deployments of Powerwall systems and advancements in manufacturing. The energy storage sector saw deployments grow by 75% year-over-year, reflecting increased demand and market expansion.
3. **Vehicle Deliveries and Price Strategy**: Despite average selling prices declining to under $40,700 in Q3, primarily due to price cuts and shifts in product mix, vehicle deliveries increased by approximately 6.4% year-over-year, reaching 462,890 vehicles. This growth in deliveries, although partially offset by lower prices, still contributed positively to revenue.
4. **Market Expansion and Product Innovation**: Tesla's continued investment in innovation and market expansion, particularly in areas like AI and robotics, has likely contributed to its revenue growth. The development of AI infrastructure and the introduction of new products, such as the Optimus robot, indicate a strategic focus on emerging markets.

In summary, Tesla's revenue surprises in 2024 are driven by strategic revenue streams like regulatory credits, the growth of its energy business, and vehicle deliveries, along with market expansion and product innovation.