In the media

Tesla’s battery-storage sales are growing way faster than EV sales

By Eric Wesoff

Canary Media

24 April 2023

PA Consulting energy storage expert Dan Finn-Foley discusses Tesla’s battery-storage business in a Canary Media article.

Read the full Canary article.

The article notes that unprecedented demand and a new factory coming online drove Tesla’s energy-storage business, specifically its utility-scale segment, to record highs in the first quarter of this year, according to an earnings call last week. Tesla posted $1.53 billion in combined solar and storage revenue, and it is widely presumed that utility-scale storage accounted for a large portion of that total, though the company didn’t break it out.

The storage segment of the pioneering automaker shipped 3.9 gigawatt-hours of battery packs in Q1, including its utility-scale Megapacks and home-storage Powerwalls. That’s a startling 360 percent jump compared to a year prior.

Tesla CEO Elon Musk said on the call that the company’s stationary-storage growth will eventually outpace its vehicle growth. That trend became clear in Q1, when vehicle shipments rose just 36 percent year-over-year – a far cry from the near quadrupling in storage shipments.

For now, Tesla remains an electric-vehicle company with an energy-storage hobby. But as the surging deployment shows, that hobby is starting to look more serious. In large part, that’s courtesy of a new 40-gigawatt-hour Megapack factory ramping up production in Lathrop, California – “the first of many,” Tesla said in its April investor letter. Another Megapack factory is planned for Shanghai, with construction to start later this year.

If sustained, this hefty pace of energy-storage deployment would make Tesla one of the larger players in the industry. Still, storage accounts for a fraction of the EV firm’s total revenue, which hit $23.3 billion in Q1. The combined storage and solar business accounted for just 6.6 percent of Tesla’s revenue in Q1.

Dan said: “Tesla’s dramatic year-over-year stationary storage growth is remarkable, but not surprising.” There’s been “a dramatic uptick” in utility-scale battery storage development, “which has only been supercharged with the passage of the Inflation Reduction Act.”

He adds: Stationary storage is now “a market worthy of dedicated and specially designed products produced at the GWh scale.”

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