How much of Tesla’s revenue comes from haram?
Tesla earns its revenue from the following revenue sources:
- Automotive Sales:
Primarily composed of Tesla’s electric vehicle sales.
This segment also includes regulatory credits paid to Tesla by competitor automotive manufacturers for not meeting their required number of electric vehicle sales by state and federal governments.
- Automotive Leasing:
Tesla offers up to 48-month rental contracts for their vehicles.
Qualifying Tesla customers are given the option to purchase their vehicle after their lease has ended.
- Energy Generation and Storage:
Includes installation and sales of solar energy generation and storage products.
These products include Tesla Solar Roof, Solar Panels, Powerwall, and Megapacks/Powerpacks.
- Services and Other:
Includes sales of used vehicles, retail merchandise, vehicle insurance, repair and maintenance services, and access to Tesla’s Supercharging network.
From time to time, Tesla sells gimmick merchandise such as Tesla shorts and Tequila.
Tesla has not mentioned the contributions these limited-time items make to Tesla’s overall revenue on any of its SEC filings. We think this is likely because gimmick products contribute only a trivial amount to overall revenue. Considering all the other contributors to Tesla’s “Services and Other” segment, Practical Islamic Finance estimates gimmick products to contribute less than 1% of Tesla’s overall revenue.
The contributions from each of Tesla’s revenue segments in their Q1 2021 report were as follows:
Practical Islamic Finance concludes:
Only a non-material portion of Tesla’s revenue comes from haram.
Does Tesla rely on interest to operate?
For the Trailing Twelve Months as of December 31, 2021 (Numbers in millions, U.S. Dollars):
Interest Income: $56
Total Revenue: $53,823
Interest Expense: $358
Total Operating Expenses: $7,083
Interest Income / Revenue: 0.10%
Interest Expense / Total Expense: 5.05%
| 2021 | |
| Interest Income / Revenue | 0.10% |
| Interest Expense / Total Operating Expense | 5.05% |
Practical Islamic Finance concludes:
Tesla is not reliant on interest for its operations.
What is Tesla’s Environmental, Social, and Governance (ESG) impact?
Environment
Tesla’s website has a live count of the amount of CO2 Tesla vehicles have saved.
As of current, Tesla vehicles have saved 17,779,409.30 tons of CO2 from polluting the environment.
According to the World Health Organization, “air pollution kills an estimated seven million people worldwide every year.”
Social
According to Tesla’s Q1 2021 safety report, Tesla vehicles registered 1 accident for every 4.19 million miles driven with their Autopilot system engaged.
Drivers using only Tesla’s safety features without using their Autopilot system registered 1 accident for every 2.05 million miles driven.
Tesla compares their accident data with the NHTSA stating 1 accident occurs for every 484,000 miles in the United States.
As a result, riding in one of Tesla’s vehicles with autopilot engaged is about 4-10x safer compared to the average non-Tesla vehicle.
Tesla also has a relatively high Glassdoor rating of 3.8 out of 5.0 from over 9,000 current and previous employees compared to a 3.3 average for all other Glassdoor rated companies.
Tesla’s Xinjian showroom
On Dec. 31, 2021, Tesla announced it was opening a showroom in Xinjiang, a region that is home to China’s Uyghur Muslim population which has been subjected to immense brutality and even enslavement by the Chinese Communist Party (CCP).
While we do not agree with Tesla’s decision to open a showroom in Xinjian since the event was likely used by the CCP to advertise normality in this region, we do not think Tesla’s showroom is having a negative impact on the Uyghur Muslim population in Xinjiang or increasing their suffering. Certainly, Tesla using slave labor or benefitting from it would change our position but this has not been claimed or proven.
Governance
No notable governance highlights.
Comfort Rating
From Tesla’s business, financial and ESG reviews, Practical Islamic Finance rates Tesla stock as: