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Tesla battery exec talks Gigafactory materials sourcing and battery cell evolution

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A newly published video that was taken in March reveals a keynote address by Tesla Director of Battery Technology Kurt Kelty from the International Battery Seminar in Florida. The battery executive spoke about the company’s vision on energy management, solar-powered homes, and evolution from the 18650 lithium ion battery cell to the most recent 2170 cell that’s being used in Tesla’s Powerwall 2, Powerpack 2 and the upcoming Model 3 sedan.

Kelty describes Tesla’s original plan to start with the 18650 cell due to it being widely available and having the best battery chemistry. The company would make the cylindrical 18650 battery cell the foundation for its stationary storage products and fleet of electric vehicles.

To optimize the cost structure of batteries and to identify the best suppliers, Tesla vets their material supply chains from the ground up. The company has secured raw materials needed for 2017 production, noted Kelty. Kelty also touched on Tesla’s approach to sourcing lithium hydroxide, graphite and cobalt – all of the major raw materials used in the production of its high performance battery cells.

The development of the 2170 cell was a result of a first principles approach to battery materials sourcing, design, and manufacturing. Tesla worked with battery manufacturers to identify the optimal dimensions for the cell after taking into account energy density, weight and cooling requirements unique to an electric vehicle.

The battery executive also revealed Tesla’s ability to recycle batteries on-site at the Gigafactory. This makes sense as the factory itself will have byproducts that will need to be recycled, and having an integrated recycling facility is the most efficient way to handle this waste stream. Tesla CTO and co-founder JB Straubel along with another Tesla executive has recently been linked to an advanced materials recycling startup, rumored to become the company that will handle recycling for Tesla.

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Kelty shared that ultimately, everything Tesla has built is focused directly on its core mission of advancing the world’s adoption of sustainable energy. The battery products in its cars and energy storage products will store the power generated by the vast installations of Tesla Solar Rooftops and Tesla Solar panels that can be monitored and controlled by a user’s smartphone app.

https://www.youtube.com/watch?v=s73nWTefuUM&t=209s

I'm passionate about clean technology, sustainability and life. I've worked in manufacturing, IT, project management and environmental...and enjoy unpacking complex topics in layman's terms. TSLA investor. Find more of my words on my website or follow me on Twitter for all the latest. Tesla Referral link: http://ts.la/kyle623

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Energy

Tesla Energy celebrates one decade of sustainability

Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.

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(Credit: Tesla)

Tesla Energy recently celebrated its 10th anniversary with a dedicated video showcasing several of its milestones over the past decade.

Tesla Energy has gone far since its early days, and it is now becoming a progressively bigger part of the company.

Tesla Energy Early Days

When Elon Musk launched Tesla Energy in 2015, he noted that the business is a fundamental transformation of how the world works. To start, Tesla Energy offered the Powerwall, a 7 kWh/10 kWh home battery system, and the Powerpack, a grid-capable 100 kWh battery block that is designed for scalability. A few days after the products’ launch, Musk noted that Tesla had received 38,000 reservations for the Powerwall and 2,500 reservations for the Powerpack

Tesla Energy’s beginnings would herald its quiet growth, with the company later announcing products like the Solar Roof tile, which is yet to be ramped, and the successor to the Powerwall, the 13.5 kWh Powerwall 2. In recent years, Tesla Energy also launched its Powerwall 3 home battery and the massive Megapack, a 3.9 MWh monster of a battery unit that has become the backbone for energy storage systems across the globe.

Key Milestones

As noted by Tesla Energy in its recent video, it has now established facilities that allow the company to manufacture 20,000 units of the Megapack every year, which should help grow the 23 GWh worth of Megapacks that have already been deployed globally. 

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The Powerwall remains a desirable home battery as well, with more than 850,000 units installed worldwide. These translate to 12 GWh of residential entry storage delivered to date. Just like the Megapack, Tesla is also ramping its production of the Powerwall, allowing the division to grow even more.

Tesla Energy’s Role

While Tesla Energy does not catch as much headlines as the company’s electric vehicle businesses, its contributions to the company’s bottom line have been growing. In the first quarter of 2025 alone, Tesla Energy deployed 10.4 GWh of energy storage products. Powerwall deployments also crossed 1 GWh in one quarter for the first time. As per Tesla in its Q1 2025 Update Letter, the gross margin for the Energy division has improved sequentially as well.

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Tesla Energy shines with substantial YoY growth in deployments

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Credit: Tesla Megapack

Tesla Energy shined in what was a weak delivery report for the first quarter, as the company’s frequently-forgotten battery storage products performed extraordinarily well.

Tesla reported its Q1 production, delivery, and deployment figures for the first quarter of the year, and while many were less-than-excited about the automotive side, the Energy division performed well with 10.4 GWh of energy storage products deployed during the first quarter.

This was a 156 percent increase year-over-year and the company’s second-best quarter in terms of energy deployments to date. Only Q4 2024 was better, as 11 GWh was recorded.

Tesla Energy is frequently forgotten and not talked about enough. The company has continued to deploy massive energy storage projects across the globe, and as it recorded 31.5 GWh of deployments last year, 2025 is already looking as if it will be a record-setting year if it continues at this pace.

Tesla Megapacks to back one of Europe’s largest energy storage sites

Although Energy performed well, many investors are privy to that of the automotive division’s performance, which is where some concern lies. Tesla had a weak quarter for deliveries, missing Wall Street estimates by a considerable margin.

There are two very likely reasons as to why this happened: the first is Tesla’s switchover to the new Model Y at its production facilities across the globe. Tesla said it lost “several weeks” of production due to the updating of manufacturing lines as it rolled out a new version of its all-electric crossover.

Secondly, Tesla could be facing some pressure from pushback against the brand, which is what many analysts will say. Despite the publicity of attacks on Tesla drivers and their vehicles, as well as the company’s showrooms, it would be safe to assume that we will have a better picture painted of what the issue is in Q2 after the company reports numbers in July.

New Tesla Model Y was a best-seller in China in March 2025

If Tesla is still struggling with lackluster delivery figures in Q2 after the Model Y is ramped and deliveries are more predictable and consistent, we could see where the argument for brand damage is legitimate. However, we are more prone to believe the Model Y, which accounts for most of Tesla’s sales, and its production ramp is likely the cause for what happened in Q1.

In what was a relatively bleak quarter, Tesla Energy still shines as the bright spot for the quarter.

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Energy

Tesla lands in Texas for latest Megapack production facility

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(Credit: Tesla)

Tesla has chosen the location of its latest manufacturing project, a facility that will churn out the Megapack, a large-scale energy storage system for solar energy projects. It has chosen Waller County, Texas, as the location of the new plant, according to a Commissioners Court meeting that occurred on Wednesday, March 5.

Around midday, members of the Waller County Commissioners Court approved a tax abatement agreement that will bring Tesla to its area, along with an estimated 1,500 jobs. The plant will be located at the Empire West Industrial Park in the Brookshire part of town.

Brookshire also plans to consider a tax abatement for Tesla at its meeting next Thursday.

The project will see a one million square-foot building make way for Tesla to build Megapack battery storage units, according to Covering Katy News, which first reported on the company’s intention to build a plant for its energy product.

CEO Elon Musk confirmed on the company’s Q4 2024 Earnings Call in late January that it had officially started building its third Megapack plant, but did not disclose any location:

“So, we have our second factory, which is in Shanghai, that’s starting operation, and we’re building a third factory. So, we’re trying to ramp output of the stationary battery storage as quickly as possible.”

Tesla plans third Megafactory after breaking energy records in 2024

The Megapack has been a high-demand item as more energy storage projects have started developing. Across the globe, regions are looking for ways to avert the loss of power in the event of a natural disaster or simple power outage.

This is where Megapack comes in, as it stores energy and keeps the lights on when the main grid is unable to provide electricity.

Vince Yokom of the Waller County Economic Development Partnership, commented on Tesla’s planned Megapack facility:

“I want to thank Tesla for investing in Waller County and Brookshire. This will be a state-of-the-art manufacturing facility for their Megapack product. It is a powerful battery unit that provides energy storage and support to help stabilize the grid and prevent outages.”

Tesla has had a lease on the building where it will manufacture the Megapacks since October 2021. However, it was occupied by a third-party logistics company that handled the company’s car parts.

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