A significant part of Tesla’s growth in gross profit last quarter came from an increase in profits from servicing Tesla’s vehicles and selling energy through its Supercharger network – things Elon Musk said Tesla wouldn’t aim to make profits from.
Back in 2016, Elon Musk was quoted saying this at a Tesla event when defending the automaker’s strategy to operate its own service centers rather than using dealerships:
Our philosophy with respect to service is not to make a profit from service. I think that it’s terrible to make a profit on service.
Musk often criticized other automakers, specifically GM, for selling “cars that then need service” at dealerships and then making a lot of profits selling replacement parts to customers through those dealerships.
The CEO is often quoted saying, “The best service is no service,” and Tesla aims to improve service by increasing the reliability of its vehicles, resulting in less need for service.
Reality is quite different. Tesla owners are often experiencing long wait times to get service appointments at Tesla and how the automaker plans to address this situation was a top question during Tesla’s earnings call yesterday.
As for the Supercharger network, Musk also said that it would “never become a profit center” for Tesla.
The CEO always said that the goal was of the charging network was to be a service for Tesla owners, and now non-Tesla owners, with the goal of revinesting revenue into growing the capacity of the network.
Tesla’s reality is changing
Over the last two quarters, Tesla’s profits from “services and others” have surged.
For the last few years, Tesla’s services and others were only marginally profitable, which was in line with Musk’s previously stated strategy on that front, but something has changed.
With Tesla’s Q3 2024 financial results, the automaker that “services and others” gross profits jumped to almost $250 million – a 90% increase year-over-year:
Tesla is one of the most opaque automakers when it comes to breaking down its financials. It bundles many things into “services and others, ” making it hard to know exactly what is going on inside.
The bulk of that accounting line has historically been car service and used car sales, but in Tesla’s latest financial results, which saw an important increase in profits for “services and others”, the automaker confirmed that the surge was specifically due to its Supercharger network and service margins:
The Services and Other business achieved a record gross profit in Q3, growing over 90% year-on-year. Sequential growth in gross profit was driven mostly by higher gross profit generation from supercharging, service center margin improvement and higher gross profit generation from Parts Sales and Merchandise.
Now at $~250 million, it’s still a small part of Tesla’s overall gross profits, but it does account for a significant part of the ~$800 million increase in gross profits compared to last year.
Electrek’s Take
This is something that irritates me personally because I’ve used those quotes from Elon about service to counter the hesitation of many potential Tesla buyers regarding the maintenance and service of electric vehicles.
Elon’s statement reassured them, but if that was ever really the plan, it certainly isn’t anymore based on the latest results.
Tesla’s gross margins for service and selling replacement parts are surging, and Tesla is proudly saying it in its financial results.
Myself, I have two Tesla vehicles that need service right now and Tesla is trying to sell me very expensive parts.
As for Supercharger, prices are going up.
To be fair, Tesla making money on the Supercharger network is quite new and the company is just starting to sell more charging to non-Tesla EVs. It’s very possible that Tesla might need to adjust to keep the Supercharger just marginally profitable.
It’s just the fact that Tesla writes “sequential growth in gross profit was driven mostly by higher gross profit generation from supercharging,” it’s not super encouraging.
But in the meantime, some Supercharger stations are getting quite expensive. Hopefully, Tesla gets those prices into control
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Japanese equipment giant Komatsu has added a not-so-giant electric excavator to its growing lineup of battery-powered construction equipment. The new Komatsu PC20E-6 electric mini excavator promises a full day of work from a single charge.
Komatsu says the design of its latest mini excavator was informed by data sourced from more than 40,000 working days of comparably-sized diesel excavators. The company found that, in 90% of its global customers’ mini excavator deployments, these vehicles are in active use for less than 3.5 hours per day.
“This defined the target for the required, reliable working time with the excavator,” reads the Komatsu web copy. “This result makes it possible for Komatsu to offer an attractively priced machine with a performance that exactly matches the requirements.”
Keeping costs down are relatively conservative specs. Komatsu chose to power the PC20E-6 with a 23.2 kWh battery pack sending electrons to an 11 kW (~15 hp), high-torque electric motors. Not exactly super impressive on paper, but the machine has an operating weight of 2,190 kg and enough juice for up to four (4) hours of continuous operation.
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More than enough, in other words, to have completed 90% of of those 40,000 work days the company analyzed.
Getting it done
PC20E-6 electric mini excavator; via Komatsu.
If, for some reason, that four hours’ runtime isn’t enough, an on-board charging option for 230V and 3kW charging power compatible with various plug adapters is standard, with an external DC quick charger for 400V and 12 kW charging as optional. In either case, it won’t be long before the machine is back at work.
To help the later adopters sleep well about their battery-powered investments, the PC20E-6 ships with Komatsu’s E-Support maintenance program, which includes free scheduled maintenance by a Komatsu-trained technician, a 3 year/2,000 hour warranty on the machine, plus a 5 year/10,000 hour warranty on the electric driveline. The company says the battery should last 10 years.
“The Komatsu E-Support customer program is included free of charge with every market-ready electric mini excavator and offers exclusive machine support,” said Emanuele Viel, Group Manager Utility at Komatsu Europe. “The bottom line is that the risk for the end customer is significantly reduced, especially when it comes to exploring the electrification advances in the industry.”
Komatsu hasn’t released official pricing quite yet, but has revealed that the P20E-6 will begin series production this October.
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Tesla has unexpectedly terminated a contractor’s contract at Gigafactory Texas, resulting in the layoff of 82 workers who were supporting the automaker’s production at the giant factory in Austin.
MPW Industrial Services Inc., an Ohio-based industrial service provider specializing in cleaning and facility management, has issued a new WARN notice, confirming that it will lay off 82 workers in Texas due to Tesla unexpectedly ending its contract with the company.
Here are the details from the WARN notice:
State / agency: Texas Workforce Commission (TWC).
Notice date: August 27, 2025.
Employees affected: 82
Likely effective date: September 1, 2025
Context from the filing/letter: layoffs tied to an unexpected termination of a major customer contract (Tesla—Gigafactory Texas, 1 Tesla Road); positions include 61 technicians, 7 team leads, 7 supervisors, 7 managers; no bumping rights; workers not union-represented.
In April 2024, Tesla initiated waves of layoffs at the plant, resulting in the dismissal of more than 2,000 employees in Austin, Texas.
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Since then, Tesla’s sales have been in a steady decline. While the automaker is expected to have a strong quarter in the US in Q3 due to the end of the tax credit, sales are expected to decline further in Q4 and the first half of 2026.
Many industry watchers have expected Tesla to initiate further layoffs due to the situation.
Electrek’s Take
We may be seeing the beginnings of a new wave of layoffs at Tesla, as the automaker typically starts with contractors.
To be fair, Tesla could also potentially end the contract unexpectedly for other reasons, but the timing does align with the need to cut costs and staff ahead of an inevitable downturn in US EV sales.
I think it’s inevitable that we start seeing some layoffs. I think Tesla will have to slow down production in the US to avoid creating an oversupply, especially in Q4-Q1.
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First, it was e-bikes, offering an efficient, effective, and low-cost way for teens and just about everyone to zip around town, yet drawing the temper of suburban traditionalists. Now golf carts are the new public enemy number one in suburbia, at least if you ask the growing number of online groups where residents complain about these small electric vehicles “clogging” their streets.
But beyond the hand-wringing, golf carts and their more sophisticated cousins known as Neighborhood Electric Vehicles (NEVs) or Low Speed Vehicles (LSVs), are quietly becoming a popular alternative to cars for short trips around US cities and suburbs.
While most people still associate golf carts with retirement communities in Florida or slow rides across 18 holes, street-legal versions have been around for the last few decades.
But these aren’t your grandpa’s bare-bones carts, complete with a golf pencil clip. Many now come with DOT seat belts, lights, turn signals, mirrors, backup cameras, and speed limiters that allow them to operate legally on roads up to 35 mph, as long as they meet all the federal requirements for Low-Speed Vehicles (LSVs).
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That means such vehicles are legally allowed to operate like cars, trucks, bicycles, or motorcycles on the vast majority of residential streets and a surprising portion of urban grids. In other words, for grabbing groceries, school drop-offs, or cruising to a friend’s house, they’re a practical, cheaper, and far greener substitute for firing up a 5,000-pound SUV.
The Club Car Cru adds extra luxury to the concept of an LSV
Golf carts have been slowly taking off for years, but the pandemic accelerated the trend. Sales of golf carts and LSVs spiked as families looked for safe, outdoor transportation and an easy way to get around their neighborhoods. Now, in cities all over the country, the sight of parents driving their kids to school or running errands in a cart is increasingly common. In some towns, petitions have even popped up with hundreds of residents asking for local ordinances to legalize them on more streets, according to the Daily Mail.
Of course, not everyone is thrilled. There’s growing backlash against the increase in golf carts on streets, with many residents calling them a “plague” and complaining that they’re taking up space on the roads, in parking lots, or creating unsafe conditions. While rare, there have been serious accidents too, with a handful of tragic cases highlighting the dangers of mixing small, lightweight carts with full-size vehicles. Critics argue that carts lack the crash protection of cars and don’t always fall under homeowners’ insurance policies if an accident happens.
But for every critic, there’s a supporter pointing out that golf carts take cars off the road, save money on fuel, and are no more dangerous than scooters or e-bikes – modes of transport that already share the streets. And major golf cart makers have been happy to respond to the demand with boosted sales and new models. Companies like E-Z-GO, Club Car, WAEV, Kandi, and others are all rushing new models to the market as more suburban commuters discover that their next electric vehicle might just cost a fraction of what they thought it would – and come with a better breeze, too.
The GEM microcars are classic LSVs that have brought smiles to families’ faces for decades
Electrek’s Take
If I didn’t know any better, I’d say it’s like the Karens are just following me around to poo-poo on any alternative vehicle I happen to drive that week. They’ve hit all my favorites. Pretty soon, they’ll be coming for my electric tractors, too!
But seriously, this feels like déjà vu. The same arguments we’ve heard for years against e-bikes are now being recycled against golf carts: too unsafe, too disruptive, too “different” from the car-centric status quo.
But the reality is, again, quite the same as e-bikes. These are small electric vehicles that make a ton of sense and are totally street legal, at least when they’re built correctly to conform to the proper laws.
They come with a lot of the same benefits, too. They’re cheap to operate, easy to park, perfect for short trips, and they prevent larger cars from needlessly clogging residential streets. Will they ruffle feathers among the kind of folks who have had one too many frisbees land in their yard? Perhaps. But much like e-bikes, their popularity is only going one direction – up.
I leave you with a few images of perhaps my favorite of all, the Kandi Mini. The nay-sayers can pull it from my cold, dead, golf
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