Tesla Energy - Growing Faster Than You Think

Tesla Energy - Growing Faster Than You Think

Tesla energy has been growing at about a 90% pace year after year, and this is currently about 3 times as fast as the auto business. When you dig deeper into Tesla energy, you can see that it could indeed be as big as Tesla's auto business one day.

Tesla energy has two primary products: the Powerwall and Megapack. The Megapack is simply a much bigger Powerwall. Powerwall is smaller and used for homes, while Megapack is large and used for businesses and energy companies.

Megapack is where the real money is and accounts for most of Tesla energy revenue. It sells for around $1 million per Megapack.

There is also a solar roof unit to Tesla energy, but this business unit has never been profitable, and I wouldn't be surprised to see Tesla overhaul it or cancel it completely.

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Tesla Energy - One Day as Big as the Auto Business

The real juicy part of the Tesla energy discussion is if Tesla energy can one day be as big as the auto side of Tesla. I think it can. A year ago, Tesla energy generated $3.3 billion in revenue. A year later, and Tesla energy revenue is around $5.9 billion. This is phenomenal growth. However, this is only part of the story.

Tesla has something called deferred revenue and unsatisfied performance obligation "UPO". These are two parts to Tesla energy revenue and one X user, Cern Basher, CFA, calls this indicative revenue.

Indicative revenue was $3.75 billion a year ago, which is $450 million higher than the actual reported revenue. Here in Q3, 2023, Tesla energy has $7.99 billion in total revenue when you include indicative revenue, which is 113% higher than a year ago. That's an even bigger increase than what was reported.

There is a $2.1 billion revenue difference when you include indicative revenue. It will be interesting to see this revenue catch up in Tesla's reporting as it is eventually realized in the actual numbers. With this, Tesla energy could become as big as the auto business is now in about 4 or 5 years if it maintains its growth rate. Of course, Tesla auto will be bigger then, but eventually, energy will catch up at this pace.

Diving a little deeper into the growth in Tesla Energy... it appears to be even stronger than reported.

Tesla Energy comprises of two parts: Energy storage products like Powerwall and Megapack, and Solar energy offerings. The main driver of this business line is the Megapack, an… pic.twitter.com/llaHqvYr1O
— Cern Basher, CFA (@CernBasher) October 24, 2023

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What do you think about Tesla energy - is it one day going to be as big as the auto business?

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter or LinkedIn to stay in touch and follow his Tesla news coverage on Torque News. Image Credit, Tesla, Screenshot