Many bears view Tesla as no more than an overvalued auto manufacturer, but the company is making notable strides across green energy and artificial intelligence (AI).
One of the biggest knocks against electric vehicle (EV) maker Tesla (TSLA 0.66%) is the idea it’s just a car company, not a tech giant that deserves a place among the Magnificent Seven.
Indeed, EV sales account for the large majority of Tesla’s revenue. However, besides the massive potential behind opportunities like artificial intelligence (AI) that bullish investors may point to, the company has an existing energy storage business too.
Let’s explore some of Tesla’s capabilities outside of manufacturing EVs and assess what the company could look like in the long run.
The energy storage business is building momentum
Tesla’s energy storage business revolves around the company’s Megapack battery. During the first quarter of 2024, this segment generated both record revenue and gross profit.
These details around Tesla’s other operating segments often go overlooked as investors and Wall Street analysts focus on the company’s vehicle production and delivery figures.
Tesla’s autonomous driving software, full self-driving (FSD), has collected over 1.3 billion miles of driver data — more than any other competing platform.
Moreover, while large scale commercialization of self-driving cars is likely still years away, Musk has teased that investors are in store for a big surprise later this year as it relates to the company’s autonomous driving ambitions.
Another AI-related opportunity lies in robotics, and Tesla is just one of many companies aggressively seeking out areas this technology can enhance its business.
At the end of the day, EVs may be Tesla’s current bread and butter. But there’s no denying the nascent parts of this company are key to its growth story, and its most lucrative long-term prospects all revolve around AI. Investors have good reasons to remain bullish that Tesla can expand far beyond the core EV business.
