Tesla’s Energy business, while not attracting as many headlines as the company’s electric car division, continues to expand its reach. While some of Tesla Energy’s projects fly practically under the radar, the company’s lithium-ion battery storage units have, quite literally, changed lives across the globe.
When Tesla announced its first quarter results last week, the company noted that it is streamlining its residential energy storage business with a simplified online sales channel. The company also stated that it expects to grow its Energy business this year, as it works through the backlog of Powerwall orders that have been, for the most part, put aside in favor of the company’s ramp for the Model 3 in 2018.
“Energy generation and storage revenue should increase significantly in 2019. This increase is driven mainly due to the storage business as we increase production to address our backlog in Powerwall orders and deliver on our pipeline of orders for commercial storage and an expected growth in retrofit solar deployments in the second half of 2019,” Tesla noted.
One of these Tesla Energy orders could be found in Eritrea, a country in the Horn of Africa. Tesla was involved in two projects in the nation, particularly in Areza and Maidma, where it played a crucial role in establishing a 1.25MW and 1MW mini-grid for the rural communities. The projects were led by UK solar developer Solarcentury, who opted to utilize Tesla’s lithium-ion batteries as the energy storage units of choice for the mini-grid. Overall, the project benefitted around 40,000 people and businesses, which will now be getting cheaper and more stable power.
Prior to the installation of its solar panels and Tesla batteries, the communities in Areza and Maidma relied solely on diesel. With the mini-grid in place, the residents of the African nation will be able to step away from inconveniences such as fluctuating diesel prices, steep maintenance costs of its diesel equipment, and reduced air quality. Theo Guerre-Canon, a project manager at Solarcentury, described the mini-grid’s benefits in a statement to Forbes. “Our hope is that access to reliable electricity will support wider economic growth in the region and social development. For example, there’s a clinic in Areza that will now benefit from uninterrupted electricity,” he said.
This is not the first time that Tesla’s batteries have literally changed the lives of communities for the better. In the Philippines, Tesla worked with a solar provider to install a microgrid in a town that’s notorious for never having 24/7 power. Since coming online, Tesla’s batteries have affected many of the town’s residents. Fishermen, for example, are now able to freeze their catch and sell them to towns that are farther away, resulting in more income. These benefits might seem trivial to many, but for residents who have been conditioned to think of power interruptions as part of everyday life, having round-the-clock electricity thanks to Tesla’s batteries is remarkable.
Now that Tesla has all but mastered Model 3 production, the company appears to be finally ready to push its Energy business more aggressively. This was teased by Elon Musk himself during the unveiling of the Tesla Model Y, where he noted that 2019 would be the “Year of the Solar Roof and Powerwall.” Musk also highlighted how Tesla Energy is invaluable to the company’s mission. “Solar plus battery plus electric vehicles, we have a fully sustainable future. That’s a future you can feel really excited and optimistic about. I think that really matters,” Musk said. For the communities that have been changed and helped by Tesla’s batteries, these words definitely ring true.
Energy
Tesla Energy is the world’s top global battery storage system provider again
Tesla Energy captured 15% of the battery storage segment’s global market share in 2024.

Tesla Energy held its top position in the global battery energy storage system (BESS) integrator market for the second consecutive year, capturing 15% of global market share in 2024, as per Wood Mackenzie’s latest rankings.
Tesla Energy’s lead, however, is shrinking, as Chinese competitors like Sungrow are steadily increasing their global footprint, particularly in European markets.
Tesla Energy dominates in North America, but its lead is narrowing globally
Tesla Energy retained its leadership in the North American market with a commanding 39% share in 2024. Sungrow, though still ranked second in the region, saw its share drop from 17% to 10%. Powin took third place, even if the company itself filed for bankruptcy earlier this year, as noted in a Solar Power World report.
On the global stage, Tesla Energy’s lead over Sungrow shrank from four points in 2023 to just one in 2024, indicating intensifying competition. Chinese firm CRRC came in third worldwide with an 8% share.
Wood Mackenzie ranked vendors based on MWh shipments with recognized revenue in 2024. According to analyst Kevin Shang, “Competition among established BESS integrators remains incredibly intense. Seven of the top 10 vendors last year struggled to expand their market share, remaining either unchanged or declining.”

Chinese integrators surge in Europe, falter in U.S.
China’s influence on the BESS market continues to grow, with seven of the global top 10 BESS integrators now headquartered in the country. Chinese companies saw a 67% year-over-year increase in European market share, and four of the top 10 BESS vendors in Europe are now based in China. In contrast, Chinese companies’ market share in North America dropped more than 30%, from 23% to 16% amid Tesla Energy’s momentum and the Trump administration’s policies.
Wood Mackenzie noted that success in the global BESS space will hinge on companies’ ability to adapt to divergent regulations and geopolitical headwinds. “The global BESS integrator landscape is becoming increasingly complex, with regional trade policies and geopolitical tensions reshaping competitive dynamics,” Shang noted, pointing to Tesla’s maintained lead and the rapid ascent of Chinese rivals as signs of a shifting industry balance.
“While Tesla maintains its global leadership, the rapid rise of Chinese integrators in Europe and their dominance in emerging markets like the Middle East signals a fundamental shift in the industry. Success will increasingly depend on companies’ ability to navigate diverse regulatory environments, adapt to local market requirements, and maintain competitive cost structures across multiple regions,” the analyst added.
Energy
Tesla inks multi-billion-dollar deal with LG Energy Solution to avoid tariff pressure
Tesla has reportedly secured a sizable partnership with LGES for LFP cells, and there’s an extra positive out of it.

Tesla has reportedly inked a multi-billion-dollar deal with LG Energy Solution in an effort to avoid tariff pressure and domesticate more of its supply chain.
Reuters is reporting that Tesla and LGES, a South Korean battery supplier of the automaker, signed a $4.3 billion deal for energy storage system batteries. The cells are going to be manufactured by LGES at its U.S. factory located in Michigan, the report indicates. The batteries will be the lithium iron phosphate, or LFP, chemistry.
Tesla delivers 384,000 vehicles in Q2 2025, deploys 9.6 GWh in energy storage
It is a move Tesla is making to avoid buying cells and parts from overseas as the Trump White House continues to use tariffs to prioritize domestic manufacturing.
LGES announced earlier today that it had signed a $4.3 billion contract to supply LFP cells over three years to a company, but it did not identify the customer, nor did the company state whether the batteries would be used in automotive or energy storage applications.
The deal is advantageous for both companies. Tesla is going to alleviate its reliance on battery cells that are built out of the country, so it’s going to be able to take some financial pressure off itself.
For LGES, the company has reported that it has experienced slowed demand for its cells in terms of automotive applications. It planned to offset this demand lag with more projects involving the cells in energy storage projects. This has been helped by the need for these systems at data centers used for AI.
During the Q1 Earnings Call, Tesla CFO Vaibhav Taneja confirmed that the company’s energy division had been impacted by the need to source cells from China-based suppliers. He went on to say that the company would work on “securing additional supply chain from non-China-based suppliers.”
It seems as if Tesla has managed to secure some of this needed domestic supply chain.
Energy
Tesla Shanghai Megafactory produces 1,000th Megapack for export to Europe
The Shanghai Megafactory was able to hit this milestone less than six months after it started producing the Megapack.

Tesla Energy has announced a fresh milestone for its newest Megapack factory. As per the electric vehicle maker, the Shanghai Megafactory has successfully produced its 1,000th Megapack battery.
The facility was able to hit this milestone less than six months after it started producing the grid-scale battery system.
New Tesla Megapack Milestone
As per Tesla Asia in a post on its official accounts on social media platform X, the 1,000th Megapack unit that was produced at the Shanghai Megafactory would be exported to Europe. As noted in a CNEV Post report, Tesla’s energy products are currently deployed in over 65 countries and regions globally. This allows Tesla Energy to compete in energy markets that are both emerging and mature.
To commemorate the 1,000th Megapack produced at the Shanghai Megafactory, the Tesla China team posted with the grid-scale battery with celebratory balloons that spelled “Megapack 1000.” The milestone was celebrated by Tesla enthusiasts on social media, especially since the Shanghai Megafactory only started its operations earlier this year.
Quick Megafactory Ramp
The Shanghai Megafactory, similar to Tesla’s other key facilities in China, was constructed quickly. The facility started its construction on May 23, 2024, and it was hailed as Tesla’s first entry storage project outside the United States. Less than a year later, on February 11, 2025, the Shanghai Megafactory officially started producing Megapack batteries. And by March 21, 2025, Tesla China noted that it had shipped the first batch of Megapack batteries from the Shanghai plant to foreign markets.
While the Shanghai Megafactory is still not at the same level of output as Tesla’s Lathrop Megafactory, which produces about 10,000 Megapacks per year, its ramp seems to be quite steady and quick. It would then not be surprising if Tesla China announces the Shanghai Megafactory’s 2,000th Megapack milestone in the coming months.
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