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Tesla Energy Storage Business Is Booming: Q1 2023 Results

The Tesla Energy business, after a period of consistent growth, has significantly accelerated and entered into a phase of very rapid expansion. Things on the solar side are also positive, but this branch is relatively small.

According to the company, in Q1, Tesla Energy generation and storage revenues increased by 148 percent year-over-year to $1.529 billion (6.6% of the total revenues), while the cost of revenues stands at $1.361 billion.

Tesla reports that its battery energy storage systems (BESS) deployment more than quadrupled year-over-year (up 360 percent year-over-year) to a new quarterly record of 3,889 megawatt-hours (MWh) or nearly four gigawatt-hours (GWh).

This result is pretty amazing, when compared to the historical deployment levels, but at the same time, it’s still just the beginning. It’s expected that in the near future, quarterly results will exceed 10 GWh.

Total battery energy storage (Powerwall, Powerpack and Megapack) deployment:

  • Q1: 3,889 MWh (up 360% year-over-year)

Tesla explains that the boost was possible thanks to the launch of the all-new Megapack factory in Lathrop, California (announced in 2021), which is expected to produce 40 GWh of Megapack battery systems annually (10 GWh per quarter on average).

“Energy storage deployments increased by 360% YoY in Q1 to 3.9 GWh, the highest level of deployments we have achieved due to 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.”

In the future, there will be more such plants built around the world, including the recently announced one in Shanghai – potentially around 40 GWh/year (assuming around 10,000 Megapack units). The investment is estimated at about $2 billion and should be ready in 2024 (production start in Q2 2024).

“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.”


Those two plants alone, at full capacity, should be able to produce 80 GWh of BESS, and on top of that comes a few GWh per year from Tesla’s other facilities.

The next step might be a third BESS factory (40 GWh/year) in Europe, where there is a pretty solid demand for such products.

Tesla offers three main types of ESS products (all numbers tentative/might change with future product iterations):

  • Powerwall for home installations (13.5 kWh usable / 7 kW peak / 5 kW continuous per unit)
  • Powerpack for commercial installations (Up to 232 kWh / Up to 130 kW per unit)
  • Megapack (3 MWh units the largest project by utilities)

Tesla Powerwall

Tesla Powerpack

Tesla Megapack

In the case of the solar business (conventional panels and Solar Roof), the results are slightly improved compared to the previous year.

In Q1, Tesla managed to increase solar deployments by 40 percent year-over-year to 67 megawatts (MW). However, as we can see below, this result is far from Tesla’s best results (especially in the era of SolarCity).

Tesla explains:

“Solar deployments increased by 40% YoY in Q1 to 67 MW, but declined sequentially in the quarter, predominantly due to volatile weather and other factors. In addition, the solar industry has been impacted by supply chain challenges.”

Total solar (conventional panels and Solar Roof) deployment:

  • Q1: 67 MW (up 40% year-over-year)

Tesla’s solar solutions:

Tesla Solar Panels

Tesla Solar Roof

Tesla remains silent in its quarterly report about the Solar Roof installation progress. The Solar Roof is produced at Gigafactory 2 in New York.

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