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Tesla dumbs down Powerwall 2 offering but it actually comes in two versions

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Tesla Powerwall 2

Tesla CEO Elon Musk revealed in October that the second generation of its residential storage battery — the Powerwall 2 — would have double the energy density of the original product and cost $5,000 with a built-in inverter. That’s a significant upgrade over the original, which needed a separate external inverter and was priced at $7,000 not including the price of the separate inverter and installation costs. More energy storage and an inverter for less money?

Yes and no. Green Tech Media has learned the company is quietly offering two versions of the Powerwall 2, one with a built in AC inverter and one that requires a separate external DC inverter. Why the difference? It depends on how a customer intends to use the Powerwall 2.

Ravi Manghani, energy storage director at GTM Research, has the answer. “The AC one maximizes efficiency for self-consumption in real time or export to the grid,” he says. “The DC system maximizes efficiency for customers who are less likely to consume during the daytime when the solar is producing — customers who need time-shifting to evening hours.” Offering the Powerwall 2 with and without an inverter allows the installer to custom design the system to meet the needs of individual customers.

Why is Tesla not touting the two different products? Manghani thinks it may be to avoid confusing customers with too much technical information. Explaining the difference between AC and DC current and then adding in the different efficiency levels of DC versus AC inverters may be too much information for non-professionals to comprehend. Customers are interested in price, not arcane details about how electricity works.

“Tesla is trying to simplify the information that it’s providing to the end customers, whereas other companies will specifically say ‘This is an AC-coupled system or a DC-coupled system,’” Manghini sasys. “It’s probably an information overload in some cases.”

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Tesla now suggests that customers should allow an additional $1,500 for “installation and supporting hardware,” bringing the total to $7,000. That is very close to the number Tesla quoted when the original version of the Powerwall was introduced. The difference is the second generation product has twice the capacity of the original.

One other advantage of the Powerwall 2 with built in inverter is that it will interface seamlessly with existing rooftop solar systems. There are already a million such systems in Australia, Germany, and the US that could benefit from having a Powerwall added to the mix.

Both versions are priced at $5,500 even though one comes with a built in inverter and one does not. External inverters usually cost around $2,000 or more. Bear in mind that the installed price of a Powerwall system will vary widely, depending on the complexity of installation in each individual home. Tesla is expected to begin delivering Powerwall 2 in early 2017.

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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.

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Credit: Tesla

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.

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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.

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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. 

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Credit: Tesla Asia/X

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.

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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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Energy

Tesla launches first Virtual Power Plant in UK – get paid to use solar

Tesla has launched its first-ever Virtual Power Plant program in the United Kingdom.

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Credit: Tesla Energy | X

Tesla has launched its first-ever Virtual Power Plant program in the United Kingdom. This feature enables users of solar panels and energy storage systems to sell their excess energy back to the grid.

Tesla is utilizing Octopus Energy, a British renewable energy company that operates in multiple markets, including the UK, France, Germany, Italy, Spain, Australia, Japan, New Zealand, and the United States, as the provider for the VPP launch in the region.

The company states that those who enroll in the program can earn up to £300 per month.

Tesla has operated several VPP programs worldwide, most notably in California, Texas, Connecticut, and the U.S. territory of Puerto Rico. This is not the first time Tesla has operated a VPP outside the United States, as there are programs in Australia, Japan, and New Zealand.

This is its first in the UK:

Tesla is not the only company that is working with Octopus Energy in the UK for the VPP, as it joins SolarEdge, GivEnergy, and Enphase as other companies that utilize the Octopus platform for their project operations.

It has been six years since Tesla launched its first VPP, as it started its first in Australia back in 2019. In 2024, Tesla paid out over $10 million to those participating in the program.

Tesla VPP program in California hits new capacity milestone

Participating in the VPP program that Tesla offers not only provides enrolled individuals with the opportunity to earn money, but it also contributes to grid stabilization by supporting local energy grids.

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