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Tesla Energy to power SoCal through world’s largest lithium-ion battery storage project
Tesla Energy has announced that the company has been selected by Southern California Edison to provide a 20-Megawatt Powerpack system to the Mira Loma substation. According to the Silicon Valley energy company, the system will be the world’s largest lithium ion battery storage project when complete, and will be capable of powering more than 2,500 households for a day and charge 1,000 Teslas
Cells for the Powerpack commercial-grade energy storage unit will be produced at the company’s Gigafactory plant in Sparks, Nevada. Tesla says through its blog post, “The Gigafactory’s ability to produce at a large scale will allow this system to be manufactured, shipped, installed and commissioned in three months. The system will charge using electricity from the grid during off-peak hours and then deliver electricity during peak hours to help maintain the reliable operation of Southern California Edison’s electrical infrastructure which feeds more than 15 million residents.”
The project comes after a methane gas spill took place at Aliso Canyon in Southern California last October. Over 8,000 Californians were displaced after 1.6 million pounds of methane leaked into the atmosphere as a result of a rupture in the natural gas reservoir. Soon after the Governor of California declared a state of emergency, the state’s utilities commission spawned a project that would ultimately see an energy storage solution for LA. Tesla won the bid to provide an 20MW/80MWh battery storage solution that would allow utility companies to off load energy generation from off-peak hours to times of peak demand when electricity needs can be bursty.
Addressing Peak Energy Demand with the Tesla Powerpack
Last October, a catastrophic rupture in the Aliso Canyon natural gas reservoir caused a methane gas spill that displaced more than 8,000 Californians and released an unprecedented 1.6 million pounds of methane into the atmosphere. Today, the Aliso Canyon leak is considered the worst in U.S. history, with aggregate greenhouse gas emissions said to outweigh those of the 2010 Deepwater Horizon oil spill.
Following the disaster, authorities closed the Aliso Canyon facility, which had been feeding the network of natural gas peaker plants in the Los Angeles basin, deeming it unfit to store the fuel safely and environmentally.
One year later, Los Angeles is still in need of an electric energy solution that ensures reliability during peak times. As winter approaches, homes and buildings in the basin will need more natural gas for heat. These demands apply uncharacteristically high pressure to the energy system, exposing the Los Angeles basin to a heightened risk of rolling blackouts.
Following the leak, California Governor Jerry Brown issued a state of emergency, and in May, the California Public Utilities Commission mandated an accelerated procurement for energy storage. Southern California Edison, among other utilities, was directed to solicit a utility-scale storage solution that could be operational by December 31, 2016. Unlike traditional electric generators, batteries can be deployed quickly at scale and do not require any water or gas pipelines.
Last week, through a competitive process, Tesla was selected to provide a 20 MW/80 MWh Powerpack system at the Southern California Edison Mira Loma substation. Tesla was the only bidder awarded a utility-owned storage project out of the solicitation.
Upon completion, this system will be the largest lithium ion battery storage project in the world. When fully charged, this system will hold enough energy to power more than 2,500 households for a day or charge 1,000 Tesla vehicles.
The Gigafactory’s ability to produce at a large scale will allow this system to be manufactured, shipped, installed and commissioned in three months. The system will charge using electricity from the grid during off-peak hours and then deliver electricity during peak hours to help maintain the reliable operation of Southern California Edison’s electrical infrastructure which feeds more than 15 million residents. By doing so, the Tesla Powerpack system will reduce the need for electricity generated by natural gas and further the advancement of a resilient and modern grid.
In order to achieve a sustainable energy future, one which has high penetration of solar and electric vehicles, the world needs a two-way, flexible electric grid. The electric power industry is the last great industry which has not seen the revolutionary effects of storage. Working in close collaboration with Southern California Edison, the Tesla Powerpack system will be a landmark project that truly heralds the new age of storage on the electric grid.
Tesla shared a striking video showcasing the decommissioning of the original Model S and Model X assembly line at its Fremont Factory in Northern California. Completed in just 46 days, the teardown involved heavy machinery dismantling concrete pits, removing robotic arms and conveyors, and clearing the space for new production.
The post, captioned “End of an era,” captured both the end of a historic chapter and Tesla’s aggressive pivot toward its next major initiative, Optimus.
End of an era: Decommissioning the original Model S & X assembly line in just 46 days pic.twitter.com/kGEdfhl62h
— Tesla Manufacturing (@gigafactories) July 10, 2026
The decision to retire the Model S and Model X originated during Tesla’s Q4 2025 Earnings Call in late January 2026. CEO Elon Musk announced that production of the company’s flagship sedan and SUV would wind down by the end of Q2 2026, describing it as bringing the programs to an “honorable discharge.”
Custom orders ceased around early April 2026, with the final vehicles rolling off the line in early May. A special signature delivery ceremony on May 20 marked the emotional close for these vehicles, which had defined Tesla’s early success and luxury EV segment since the Model S launch in 2012.
The primary reason for tearing down the lines was to repurpose the valuable factory floor space for high-volume production of Tesla’s Optimus humanoid robot. Musk had indicated on Earnings Calls that the Fremont S/X line would be replaced by a dedicated Optimus manufacturing line targeting a capacity of one million units per year.
This move aligns with Tesla’s broader strategic shift from traditional vehicle manufacturing toward robotics and artificial intelligence, leveraging the company’s expertise in autonomy, AI training, and high-volume production.
Optimus, Tesla’s general-purpose humanoid robot, is designed to perform repetitive or dangerous tasks in factories, warehouses, and eventually homes. Powered by Tesla’s AI and Neural Networks, it aims to be a versatile, affordable platform. Production of Optimus Gen 3 is already underway in limited form at Fremont, with full-scale output on the converted line expected to begin in late July or August.
Tesla is targeting rapid scaling, with internal ambitions pointing toward tens or even hundreds of thousands of units annually by the end of 2026.
Longer-term, Tesla is constructing a much larger second-generation Optimus facility at Giga Texas, with potential capacity reaching millions of units per year. The company views Optimus as a transformative product that could eventually surpass its automotive business in scale and value, enabling widespread deployment of useful robots across industries. CEO Elon Musk has even predicted it would be the most popular product of all-time.
As one era closes at Fremont, another is rapidly taking shape.
Elon Musk posted a candid admission on his social media platform X on June 9, declaring that he had been “clearly wrong” about Anthropic. The statement marked a notable reversal from his earlier skepticism toward the AI company.
In September, Musk had written, “Winning was never in the set of possible outcomes for Anthropic,” reflecting his view at the time that the startup had lacked the foundation or even the trajectory to succeed in what is an incredibly intense race for advanced artificial intelligence.
Musk’s latest post came amid discussion of Anthropic’s reliance on external compute resources. He praised the company’s progress, stating that Anthropic is “obviously currently the leader in AI” and that “no company has released a model as good as Mythos/Fable,” with expectations of a strong follow-up in Mythos 2.
The tone shifted dramatically from dismissal to acknowledgement of superior performance.
I was clearly wrong about Anthropic. They are obviously currently the leader in AI. No company has released a model as good as Mythos/Fable and they will undoubtedly have Mythos 2 ready soon.
And I would never cut them off in a way that hurt them badly, even as a competitor.…
— Elon Musk (@elonmusk) July 9, 2026
The context of Musk’s comments added significance. Anthropic has been operating under a recent compute deal with SpaceXAI, Musk’s AI infrastructure-focused venture. The pair entered a short-term GPU lease agreement initiated in May, providing Anthropic access to critical computing power for training and deploying its frontier models.
SpaceXAI signs agreement with Anthropic for massive AI supercomputer access
Some observers had speculated that Musk could leverage this dependency to disadvantage a rival. Musk directly addressed the possibility, writing, “I would never cut them off in a way that hurt them badly, even as a competitor. That’s not my style.”
To support his commitment to ethical competition, Musk referenced concrete examples from his other companies. Tesla famously open-sourced its entire portfolio of electric vehicle patents in 2014. The move was designed to accelerate the global adoption of sustainable transportation technology rather than protect proprietary advantages.
Tesla also made its Supercharger network available to competing electric vehicle manufacturers, transforming what could have remained an exclusive charging ecosystem into a shared infrastructure that benefits the broader industry and reduces barriers for EV adoption.
Musk further pointed to SpaceX’s practices, noting that the company launches satellites for competing commercial systems “with no increase in price or use of unfair terms.” He extended the principle to his social platform, observing that “even my worst enemies attack me on this platform,” underscoring preference for open discourse over retaliation.
These examples have illustrated Musk’s long-standing philosophy that long-term technological progress is best served by open competition and infrastructure sharing rather than leveraging market power to stifle rivals. In the fast-evolving AI sector, where compute resources and model capabilities determine leadership, Musk’s stance suggests a willingness to compete on innovation and performance alone.
Musk’s admission arrives as SpaceXAI itself advances its own frontier models while maintaining business relationships across the ecosystem. By publicly correcting his earlier assessment and reaffirming principles of fair play, Musk highlights a model of competition that prioritizes advancement of the field over short-term tactical advantages.
A Tesla analyst believes the company’s Full Self-Driving suite is close to an “inflection point,” where people will finally realize that it is more than what it appears, similar to how many view the iPhone.
Pierre Ferragu, an analyst who has covered Tesla for many years at New Street Research, says the Full Self-Driving suite is one piece of evidence supporting the view that a Tesla is more than a car. He compared it to the iPhone and noted that the high price tag seemed like a lot for a phone early on. Then people realized the iPhone was more than just something you make calls with. It made their lives simpler.
🚨 Analyst @p_ferragu says Tesla Full Self-Driving is at an “inflection point” in a recent commentary:
“A Tesla is not a car, the same way an iPhone was not a phone. As a tool that gets you to work peacefully every morning, it is not expensive. Give us 2 more quarters to see… pic.twitter.com/tm6xFrjVPV
— TESLARATI (@Teslarati) July 10, 2026
Suddenly, that price tag was justified.
Tesla offers several models under the average transaction price for a new vehicle, which was above $49,000, according to Kelley Blue Book. However, that does not take into account that many people can still not afford a $35,000 vehicle. Ferragu offers his thoughts:
“Remember when the addressable market of the iPhone was 10 million units? Then people realized how good it was, and now, nearly 250m are sold every year.
A similar evolution for Tesla is still on the table. A Tesla is not a car, the same way an iPhone was not a phone.
A model 3 at $35k + $100 per month is too expensive for most, but only as a car, the same way a $600 iPhone was too expensive for most, until most realized it was much more than a phone.
As a tool that gets you to work peacefully every morning, it is not expensive.”
This point is valid, especially considering the iPhone’s impact on the cell phone market. There are still a handful of players, but most people you know have an iPhone. The iPhone ties into Apple’s other ecosystem of products.
This is how Tesla plans to infiltrate the automotive market, and once the company offers a fully autonomous suite, or something that can allow for unsupervised self-driving, more and more people will flock to Tesla.
Ferragu believes Tesla needs two additional quarters of development before things will truly change. He didn’t elaborate on what will happen in two quarters, but he said it will give us all time to “see where this is heading.”
It is really quite interesting to see people’s reactions when they find out what a Tesla is capable of. Full Self-Driving is a great tool for taking stress out of travel; I use it daily, and it has made it really difficult to consider taking any other car on a drive of practically any length.
To me, it is really hard to believe that people will not at least seriously consider a Tesla as their next car if they experience Full Self-Driving. This is a major point for those who argue that Tesla should advertise in some way.
Tesla shows rapid teardown of Model S and X lines, paving the way for Optimus at Fremont
Elon Musk admits he was ‘clearly wrong’ about Anthropic
