Tesla's Best Growth This Quarter Came From Energy Storage, Not Cars - Business Insider

Oct 25, 2024

Tesla has a secret weapon, and it's not Elon Musk's robotaxi or the Optimus bot.

The company on Wednesday reported blowout earnings on the strength of its automotive sales — but its biggest growth area was its burgeoning business selling batteries and solar panels.

Revenue for Tesla's energy-generation-and-storage business was nearly $2.4 billion in the third quarter of 2024, up by 52% from the same period last year.

That's a big jump compared with revenue from Tesla's automotive sales, which rose by 2% over the same period.

The energy business's revenue so far this year exceeds $7 billion, meaning it accounts for nearly 10% of Tesla's total revenue.

The segment primarily includes Tesla's sales of solar panels and its Megapack and Powerwall battery systems.

It typically garners less attention than flashy but less lucrative projects like Tesla's robotaxi and its Optimus humanoid robots. Still, it has fast become a vital source of income for the automaker.

Musk noted the growth of Tesla's energy business in the company's earnings call on Wednesday, describing it as a "gigantic opportunity" for the automaker.

"The energy-storage business is growing like wildfire, with strong demand for both Megapack and Powerwall," Musk said.

The billionaire said Tesla's Megapack factory in Lathrop, California, had hit an important production milestone of 200 units a week. Tesla also told investors that the company had installed a record number of Powerwall systems for the second quarter in a row.

Tesla is also building a Megapack factory in Shanghai, which is expected to begin mass production in the first quarter of 2025.

Megapack is a commercial battery system used by grid providers to store energy and help avoid power outages. This is especially important as more providers switch to renewable energy sources that can be more intermittent than fossil fuels.

Tesla says one Megapack can store more than 3.9 megawatt-hours of energy, enough to power 3,600 homes for an hour. The company sells them for about $1 million apiece.

The Powerwall is a battery that allows customers to store energy generated by solar panels and use it to power their homes. It costs several thousand dollars, and Tesla offers it in packages with its solar panels and solar roof.

Correction: October 25, 2024 — An earlier version of this story misstated the cost of a Megapack. One costs about $1 million, not $5 million.