It took some time, but Tesla Energy is steadily accounting for a growing portion of the company’s overall business. During the first quarter of 2023 alone, Tesla Energy’s battery storage deployments increased 360% year-over-year to 3.9 GWh. A significant portion of these accomplishments was due to the Tesla Megafactory in Lathrop, California.
“Energy storage deployments increased by 360% YoY in Q1 to 3.9 GWh, the highest level of deployments we have achieved due to the ongoing Megafactory ramp. The ramp of our 40 GWh Megapack factory in Lathrop, California has been successful, with still more room to reach full capacity.
“This Megapack factory will be the first of many. We recently announced our second 40 GWh Megafactory, this time in Shanghai, with construction starting later this year,” Tesla wrote in its Q1 2023 Update Letter.
During the earnings call, Elon Musk elaborated a bit on Tesla Energy’s accomplishments in the first quarter, noting that there is still “some way to go” to reach a rate of 40 GWh per year. He also highlighted that Tesla is building another Megafactory to manufacture Megapack batteries in China.
Musk, however, also clarified a long-held stance about Tesla’s energy storage business. In the past, Musk has mentioned that he believes Tesla Energy could become larger than the company’s automotive business. During the Q1 2023 earnings call, Musk explained that this would be true based on the total gigawatt-hours worth of batteries deployed by each division.
“I should just clarify, bigger than auto from the standpoint of total gigawatt-hours deployed. So, it’s possible automotive revenue may be higher, but gigawatt-hours, I think, will be probably higher with stationary storage,” Musk said.
Despite this rather tempered outlook on a longstanding prediction about Tesla Energy’s potential, Musk did highlight that the company’s battery storage business is growing in excess of the company’s EV division.
“If you just look at what’s needed to transition the world to a sustainable energy economy, there is more stationary energy storage needed than there is mobile energy storage. We are seeing growth of our stationary storage well in excess of automotive, so that is in line with expectations,” the CEO noted.
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