Tesla Inc. (NASDAQ: TSLA) may be facing headwinds in its core automotive business, but its energy storage segment is emerging as a bright spot. While declining EV sales in 2024 rattled investors, Tesla’s energy storage products have been quietly posting triple-digit growth, signaling a promising diversification of its revenue streams.
Tesla’s Energy Storage: A Hidden Powerhouse
Tesla’s energy storage products include:
- Powerwall: A smart battery designed for homes, providing backup power and helping homeowners reduce reliance on the grid.
- Megapack: A large-scale battery solution for utility companies, used to stabilize power grids and store renewable energy.
Though these products may not receive as much media attention as Tesla’s EVs, their impact on the company’s financials is becoming increasingly significant.
Triple-Digit Growth in 2024
In 2024, Tesla deployed a staggering 31.4 gigawatt hours (GWh) of energy storage capacity—a 114% increase year over year. Even more impressively, the growth accelerated sharply in the fourth quarter. During Q4 2024, Tesla deployed 11 GWh of energy storage, representing a 244% year-over-year increase.
Despite this meteoric growth, Tesla’s energy storage sales were still supply constrained, according to the company’s Q4 shareholder update. Demand continues to outpace production capacity, indicating substantial future potential.
Energy Segment Revenue Hits $10 Billion
Tesla’s energy storage boom helped its energy generation and storage business generate nearly $10.1 billion in revenue during 2024, accounting for more than 10% of the company’s total revenue. The segment’s revenue rose 67% year over year, with Q4 alone posting a 113% increase—despite the drag from underperforming solar product sales.
More notably, the energy segment’s contribution to Tesla’s gross profit is expanding at an even faster rate. With energy storage sales growing significantly faster than the associated costs, the segment experienced margin expansion throughout the year.
Tesla Scales Up With a New Shanghai Battery Plant
To meet surging demand, Tesla is aggressively expanding its energy storage production capacity. The company recently completed a new Megapack factory in Shanghai in December 2024. This facility is set to ramp up production in the first quarter of 2025, boosting Tesla’s ability to deliver more energy storage products globally.
A Vital Component of Tesla’s Future
Tesla’s energy storage business is no longer a side venture—it’s becoming a core revenue driver. As Powerwall and Megapack sales continue to soar, the segment is poised to play an increasingly vital role in Tesla’s long-term profitability.
