Tesla’s Energy Storage Business Gains Momentum with Megapack
Tesla’s energy storage division showed promising growth in Q2 2020, contributing to the company’s fourth consecutive profitable quarter. While still dwarfed by automotive revenue, the energy segment - particularly the utility-scale Megapack system - is emerging as a key growth area for Elon Musk’s clean energy vision.
Megapack: The Rising Star of Tesla’s Energy Portfolio
- Launched in 2019 as a successor to Tesla’s groundbreaking South Australia battery project
- Achieved profitability for the first time in Q2 2020
- Demand outstripping current production capacity according to Tesla executives
- Deployment stats combined with solar, making exact performance metrics unclear
“We’re growing production rates as fast as we can,” said Drew Baglino, Tesla’s SVP of Powertrain and Energy Engineering during the earnings call.
The Long-Term Energy Vision
Tesla continues positioning itself as more than just an automaker, with Musk predicting energy will eventually rival automotive in scale:
- Energy storage deployments grew 61% quarter-over-quarter (260 MWh to 419 MWh)
- Year-over-year growth remains modest at just 1%
- Autobidder platform (automated energy trading) identified as key growth driver
- Musk calls energy storage “necessary to solve the sustainable energy problem”
Solar Business Faces Headwinds
While energy storage grows, Tesla’s solar division struggles:
- Q2 solar installations fell 23% from Q1 (27 MW deployed)
- Represents 7% decline year-over-year
- COVID-19 shelter orders likely contributed to slowdown
- Solar Roof installations tripled but exact numbers undisclosed
Tesla lost its position as top U.S. residential solar installer after acquiring SolarCity, with compe*****s Sunrun and Vivint gaining market share. The Solar Roof product represents Tesla’s attempt to regain momentum in solar.
The Road Ahead
Tesla’s energy business remains in its early growth phases:
- Energy storage recovering toward pre-pandemic levels
- No timeline provided for Musk’s predicted energy/auto parity
- Megapack and Autobidder positioned as key growth drivers
- Solar business facing challenges despite Solar Roof progress
The Q2 results demonstrate Tesla’s evolving identity as both an automotive and energy company, with Megapack emerging as the most promising near-term growth opportunity in its energy portfolio.
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