Tesla deployed record energy storage, but solar is hurting

Tesla announced today that it deployed a record amount of energy storage capacity last quarter, but its solar business is still hurting.

The Megafactory, a new manufacturing plant producing Tesla’s Megapack in California, has been contributing to the rapid growth of the company’s energy storage business over the last year.

Today, Tesla released its Q3 2023 financial results and confirmed that it delivered a new record amount of energy storage last quarter:

Energy storage deployments increased by 90% YoY in Q3 to 4.0 GWh, our highest quarterly deployment ever. Continued growth in deployments was driven by the ongoing ramp of our Megafactory in Lathrop, CA toward full capacity of 40 GWh with the phase two expansion. Production rate improved further sequentially in Q3.

At 4 GWh in Q3, Tesla has an annual production of 16 GWh and is still ramping up in Lathrop.

Tesla shared today this new image from inside the factory:

The automaker also produced a chart highlighting the impressive growth in energy storage over the last year:

While the energy storage business is at an all-time high, Tesla’s accompanying solar business has dropped to a new low that we haven’t seen in a while:

Solar deployments declined on a sequential and YoY basis to 49 MW. Sustained high interest rates and the end of net metering in California have created downward pressure on solar demand.

On top of the points mentioned by Tesla here, we also recently reported that Tesla’s solar business is going through a transformation in which the company is deploying less solar itself and instead providing its products to third-party installers.

In the financial results, Tesla also noted that its “services and other” category, which energy storage and solar fall under, are now contributing to profits significantly:

Unfortunately, Tesla doesn’t break down the financial performance of all its business units, but maybe it will have to start doing so for energy storage as it is starting to become a huge business.

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