GOTHENBURG, SWEDEN - 2019/09/14: An American automotive and energy company that specialises in ... [+] electric car manufacturing Tesla logo seen in Gothenburg. (Photo by Karol Serewis/SOPA Images/LightRocket via Getty Images)

As a leader in autonomous driving, we estimate that Tesla(NASDAQ:TSLA) recorded $1.4 billion in Software Revenue in 2019 via sales of its Full Self Driving software upgrades. These upgrades, which cost about $8,000 per vehicle currently, are also highly lucrative. So How Do Teslas Software Upgrades Impact Its Margins? We estimate that they contributed about 400 basis points (4%) to Teslas Automotive Gross Margins (revenues less direct costs, divided by revenues) of 21% in 2019. Excluding software sales, Tesla is unlikely to have been profitable over the last few quarters. No discussion about S&P inclusion.

How Do Software Sales Impact Teslas Margins?

Why Software Could Account For A Higher Mix of Margins Going Forward

Is this a good time to jump into Tesla stock? Yes especially if you believe in this one important Tesla metric: Teslas Time Horizon. On the flip side, for a more balanced, risk-adjusted view see our analysis Tesla Valuation: Jump Into Tesla, Wait, Or Get Out?

Separately, which S&P 500 component stocks have the best chance of outperforming the benchmark index? Our 5 In the S&P 500 Thatll Beat The Index: TWTR, ISRG, NFLX, NOW, V look promising.

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Will Tesla Be On S&P 500? Teslas Software Has One Clue - Forbes