Energy
Tesla’s Virtual Power Plant brings Powerwall batteries to 3K new homes in Australia
Tesla’s ambitious Virtual Power Plant project in South Australia has entered its third phase, with the initiative now aiming to add another 3,000 public housing properties to the growing solar and home battery network. With the addition of 3,000 home solar and Powerwall-equipped properties to the system, Tesla’s VPP could start providing grid support services that are equivalent to a fairly-sized battery storage system.
Phase 3 would allow the total number of homes involved in the project to grow to about 4,100 Housing SA properties across the state. Granted, this is still a small step towards Tesla’s goal of creating a Virtual Power Plant comprised of a whopping 50,000 homes, but Phase 3 could bring together roughly 20MW of rooftop solar energy and 54MWh of combined battery storage.
Functioning as a single “power plant,” the 4,100 houses in the Virtual Power Plant could play the role of a battery installation that’s only 11MWh less than the recent 50% expansion of the Hornsdale Power Reserve. In a statement to One Step Off The Grid, Energy minister Dan van Holst Pellekaan noted that the expansion of the Tesla VPP would address some of the power instability in the area.
“In a world-first, home batteries will provide the grid stability services that South Australia has lacked since the closure of the Northern Power Station, to address the legacy of instability that we inherited. This will deliver at a household level what we are also delivering through the 50% expansion of the big battery at Hornsdale Battery to address these legacy issues,” he said.
The ramp of Tesla’s Virtual Power Plant actually comes at a valuable time for South Australia, as the state is currently on track to become the first gigawatt-scale grid in the world. While this is a big milestone in the state’s push for sustainability, the growing amount of rooftop solar has become a major cause of concern for the Australian Energy Market Operator. The rollout of the Powerwall-equipped homes in the VPP could then play a role in managing the state’s huge solar resource.
“Having rooftop PV and household batteries linked through a Virtual Power Plant creates the equivalent of a grid-scale battery in our suburbs and towns, which will complement the four other grid-scale batteries already operating in South Australia. Tesla’s vision is to grow this VPP to include 50,000 homes across South Australia and has already started adding private households in addition to the Housing SA tenants participating in the project,” the minister said.
Tesla’s South Australia Virtual Power Plant has the potential to become one of the largest battery systems in the market. Once complete, the 50,000-strong system is expected to deliver 250MW of solar energy and store 650MWh of backup energy for the region. That’s far larger than the Hornsdale Power Reserve, which is already disrupting the energy landscape in South Australia even before its 50% upgrade.
Energy
Tesla Megapacks powers the xAI Colossus supercomputer
Tesla Megapacks step in to stabilize xAI’s Colossus supercomputer, replacing natural gas turbines. Musk’s ventures keep intertwining.
Tesla Megapack batteries will power the xAI Colossus supercomputer in Memphis to ensure power stability. The collaboration between Tesla and xAI highlights the synergy among Elon Musk’s ventures.
The artificial intelligence startup has integrated Tesla Megapacks to manage outages and demand surges, bolstering the facility’s reliability. The Greater Memphis Chamber announced that Colossus, recently connected to a new 150-megawatt electric substation, is completing its first construction phase. This transition addresses criticism from environmental justice groups over the initial use of natural gas turbines.
“The temporary natural gas turbines that were being used to power the Phase I GPUs prior to grid connection are now being demobilized and will be removed from the site over the next two months.
“About half of the operating turbines will remain operating to power Phase II GPUs of xAI until a second substation (#22) already in construction is completed and connected to the electric grid, which is planned for the Fall of 2025, at which time the remaining turbines will be relegated to a backup power role,” the Chamber stated.
xAI’s rapid development of Colossus reflects its ambition to advance AI capabilities, but the project has faced scrutiny for environmental impacts. The shift to Megapacks and grid power aims to mitigate these concerns while ensuring operational continuity.
The Megapack deployment underscores the collaboration among Musk’s companies, including Tesla, SpaceX, Neuralink, and The Boring Company. Tesla appears to be the common link between all of Musk’s companies. For example, The Boring Company built a tunnel in Giga, Texas. In addition, Musk has hinted at a potential collaboration between the Tesla Optimus Bot and Neuralink. And from January 2024 to February 2025, xAI invested $230 million in Megapacks, per a Tesla filing.
Tesla Energy reported a 156% year-over-year increase in Q1 2025, deploying 10.4 GWh of storage products, including Megapacks and Powerwalls. Tesla’s plans for a new Megapack factory in Waller County, Texas, which is expected to create 1,500 jobs in the area, further signal its commitment to scaling energy solutions.
As xAI leverages Tesla’s Megapacks to power Colossus, the integration showcases Musk’s interconnected business ecosystem. The supercomputer’s enhanced stability positions xAI to drive AI innovation, while Tesla’s energy solutions gain prominence, setting the stage for broader technological and economic impacts.
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.
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