Tesla's energy storage business is booming, and taking off. However, the start of Tesla's energy storage growth seems to be the end of Tesla's solar business.
Don't be fooled by the fact that Tesla's energy storage shipments fell sequentially from 9.4 to 6.9 GWh.
Accordingly, Tesla's deployment may look negative because it is working on large battery projects. If a few of them are delayed for reasons that are often out of Tesla's control, it cannot account for the distribution even though it may have delivered Megapacks.
It's better to look at year-over-year growth, which was 75% last quarter.
And it's just the beginning of Tesla's growth in energy storage applications. This week, Tesla revealed that its Lathrop Megafactory is now producing Megapacks at its planned total capacity of 40 GWh per year.
Megapack alone can contribute 10 GWh of distribution per quarter. Tesla also revealed the Powerwall reaching a production capacity of 700,000 Powerwalls per year, which can contribute more than 2 GWh of energy storage use per quarter.
In addition, Tesla revealed that the Shanghai Megafactory, which aims to produce Megapacks in China, is on track to start its first shipment in Q1 2025.
Tesla revealed all this in its Q3 2024 shareholder presentation:
The Energy business achieved a record gross margin of 30.5% in Q3, a sequential increase of 596 bps, despite lower Megapack volumes. Powerwall achieved record shipments in Q3 for the second quarter in a row. Powerwall 3 Ramp and Lathrop Megafactory continued successfully – with Lathrop demonstrating the production of 200 Megapack (annual running average of 40 GWh) in one week. As of Q3, more than 100,000 Powerwalls have been enrolled in the Virtual Power Resource programs, which bring added financial value to owners while providing much-needed support to the grid in times of stress. The Shanghai Megafactory remains on track to begin shipping Megapacks in Q1 2025.
This was all part of Tesla's 'Energy Generation and Storage'; as you can see, there is nothing about energy production. It's just about energy conservation.
Tesla's “power generation” business was sunny, but now it's going away.
A few years ago, we reported how Tesla has been killing off the solar business. Now it's so small that Tesla doesn't even bother to report its solar shipments.
The company still uses solar inverters and solar roofs, but almost entirely through third-party installers, and it's clearly not important to the company.
The word 'solar' was not mentioned once during Tesla's Q3 2024 call.
Tesla's goal now is to own the “brains” behind distributed energy systems to power its power plant products.
Electrek's Take
At this point, it's impossible to see Tesla using nearly 60 GWh of energy storage next year. That would be really impressive. Congratulations to everyone who participated.
On the solar front, I think we need to start saddling Tesla's solar business. It's disappointing how it turned out.
For those who don't know, Tesla got its solar business through the controversial acquisition of SolarCity, which was founded by Musk's cousins and funded by Musk himself.
Many saw it as a bailout, and Tesla shareholders sued Musk for it, but he defended himself by saying that although solar shipments had decreased since Tesla acquired SolarCity, it was still an important part of its business.
As soon as he won the case, Tesla began to stop reporting solar shipments and went out of business.
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