Energy
It’s time for Tesla Energy to be recognized by Wall Street
Tesla’s Energy division is big, and it is time Wall Street starting recognizing its achievements when talking about the company’s stock and its skyrocketing price.
One thing I notice when reading analyst notes or even investment expert’s thoughts on Tesla is their views are primarily based on the automotive side of things, and rarely do we see any stock insight on the energy side of the business. To me, this is unacceptable because the energy portion of the company is sizeable, and it is just as much a part of the transition to sustainable energy as the vehicles are. In fact, it could be more.
I sit and think about all of the TSLA articles I’ve written over the past few months while the stock has skyrocketed into a realm of Wall Street legends. It’s up almost 4x for the year, and basically, every evaluation or investment note from every big investment firm talks about automotive technology improvements, the company’s performance in other countries and markets, or how batteries are leading the charge in terms of EV range.
But why not talk about the energy side of things? Why not talk about Tesla’s other endeavors, which continue to grow quarter after quarter. Why is this side of the business being swept under the rug so often? Is it because cars are used by everyone, and perhaps everyone in the world could own a Tesla vehicle, and not everyone could own solar because of their environment or climate?
I don’t think that could be the reason, because Tesla vehicles are not available everywhere in the world as of right now either. But let’s be honest and look at the facts of what Tesla Energy is instead of what it isn’t.
Tesla’s Energy division will end up being as big as the automotive side of things. At least, that’s what Elon Musk said during the Q2 Earnings Call earlier this week. It certainly has the potential to be just as big, if not bigger, than the automotive side of things. Eventually, people will have to ditch their current power source for their home.
Solar is becoming cheaper, and with Tesla’s subscription and rental programs, people can afford to have world-class solar panels attached to their house for a fraction of the price. They also will not be forced to put out lump sums of cash in order to install solar panels on their home.
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Tesla Solar is also one-third less expensive than the industry average, according to the Q2 2020 Update Letter. Additionally, Solar Roof installations “roughly tripled” from Q1 to Q2, which is an outstanding statistic because it means the company is truly stepping up its game in terms of output in that front.
Powerwalls and Powerpacks for large-scale projects are also being used at more locations. In Australia, the Tesla Big Battery continues to save the area it is located in from widespread power outages, and other systems are being used across the country to transition the world to sustainable energy production and storage.
Elon and Senior Vice President, Powertrain and Energy Engineering Drew Baglino, talked about the Megapack as well during the Q2 Earnings Call. Megapack has continued to help the company integrate grid-tied storage in rapidly.
The interesting thing is, there are a lot of people who look at Tesla as an “automaker” and not as a technology company or an energy solutions company. People only look at their cars as their business, and to be honest, it’s kind of disappointing that people don’t realize that they have a world-class energy business that also offers sustainable alternatives.
Ultimately, Tesla has a lot of potential in energy, and the value of the company’s stock could be even more than what it already is. Many TSLA bulls believe that there is a limitless possibility for the company’s stock price. Some believe $2k; others believe $10k. Whatever you believe, do you think that the energy side of the company should be more involved in analyst evaluations?
Let me know by emailing me or Tweeting me!
Disclosure: I have no ownership in shares of TSLA and have no plans to initiate any positions within 72 hours.
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.
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.
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.
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.
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.
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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