Tesla reported explosive profits this week, but its biggest growth driver wasn’t cars or robots. The company’s energy business has grown more than 50% year-over-year, and by 2024 Tesla will have generated more than $7 billion in revenue. Elon Musk spoke at Tesla’s earnings conference. Energy units are “growing like wildfire,” he said.
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Tesla has a secret weapon, but it’s not Elon Musk’s robotaxis or Optimus bots.
The company reported explosive profits on Wednesday due to strong car sales, but the biggest area of growth was Tesla’s fast-growing business, which sells batteries and solar panels rather than electric cars.
Tesla’s energy generation and storage business revenue was nearly $2.4 billion in the third quarter of 2024, up 52% from the same period last year.
This is a significant increase compared to Tesla’s 2% increase in revenue from car sales during the same period.
The energy business has generated more than $7 billion in revenue so far this year, and currently accounts for nearly 10% of Tesla’s total revenue.
This segment primarily includes sales of Tesla’s solar panels and Megapack and Powerwall battery storage systems.
They typically don’t get as much attention as flashy but less profitable projects like Tesla’s robotaxis or Optimus’ humanoid robot. Still, it’s quickly becoming a vital source of revenue for automakers.
Musk mentioned the growth in Tesla’s energy business during the company’s third-quarter earnings conference on Wednesday, which the Tesla CEO called a “huge opportunity” for the automaker.
“The energy storage business is growing like wildfire, with strong demand for both Megapacks and Powerwalls,” Musk said.
The billionaire said Tesla’s Megapack factory in Lathrop, California, has reached a key production milestone of 200 cars per week. Tesla also told investors that the company installed a record number of Powerwall systems for the second consecutive quarter.
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Tesla is also building a Megapack factory in Shanghai, with mass production scheduled to begin in the first quarter of 2025.
Megapack is a commercial battery system used by power grid providers to store energy and avoid power outages. This is especially important as more providers switch to renewable energy sources that can be more intermittent than fossil fuels.
Tesla says a single MegaPack can store more than 3.9MWh of energy, enough to power an average of 3,600 homes for one hour. The company sells them for about $5 million each.
Powerwall, on the other hand, is a home battery that allows customers to store energy produced by solar panels and use it to power their homes. It costs about $16,000 before incentives, and Tesla is offering it in a package with its solar panels and its “Solar Roof” product.
