Tesla is mainly known for its high-quality electric cars, which have become the best-selling in the world - specifically the Model 3 and Model Y However, the tentacles of its business activities reach more niches: one of them is stationary batteries, in which Tesla is also having a very notable success, to the point of having totally sold out one of its flagship products, the Megapack.
Tesla's Megapacks are stationary batteries that serve as backup for power plants, substations, large companies or industrial centers. They are sold by modules: the smallest individual module can store up to 3.9 MWh of energy and has up to 1.9 MW of power. Including the cost of installation, Tesla is asking just over $2.5 million for a single Megapack unit.
Despite the (seemingly) high price of the device, they are rapidly gaining ground and are becoming more popular on the market. So much so that Tesla has removed the possibility of configuring and ordering Megapacks from its website, due to the large waiting list it was accumulating. Before temporarily withdrawing it from sale, Tesla was targeting the second half of 2024 as a lead time for new orders.
Tesla's largest stationary batteries are basically depleted all the way through the third quarter of 2024, at least at current production rates. The new generation Megapacks are manufactured at the new factory in Lathrop (California, USA), inaugurated just two months ago, where Tesla expects to produce 40 GWh annually. The company opened this new factory precisely to increase the production capacity of Giga Nevada, but even this does not seem to be enough. According to local sources, the new Lathrop Megafactory operates 24 hours a day.
In that sense Tesla announced in a statement that the demand for its storage products continues to exceed its supply capacity. “We are in the process of ramping up production at our 40 GWh Megapack factory in Lathrop, California to keep up with growing demand”.
Although it hasn't grown at the frantic pace of the electric vehicle business, the company's power division, Tesla Energy, has expanded and grown remarkably in recent years. Elon Musk himself has pointed out on several occasions that Tesla Energy has the potential to be greater in business volume than the vehicle division.
The battery business has a great advantage: they are much easier to manufacture than cars, so their production can be easily scaled up; but it also has a drawback: their cost and availability is largely determined by external providers. The latter may improve as Tesla increases its own manufacture of batteries, but for now it depends on third parties.
In 2021 the Energy Generation and Storage division generated $2.789 billion in revenue for Tesla. According to Tesla's Q3 2022 update letter, Tesla's energy storage facilities increased 62% year-over-year in Q3 to 2.1 GWh. Tesla Energy also offers smaller battery energy storage systems: the Tesla Powerwall, designed for home use, and the Tesla Powerpack, designed for small businesses and smaller power projects. The company also sells software to monitor and optimize energy use and solar tiles for homes.
All in all, Tesla's Megapack is an extremely successful product that is currently sold out until 2024, but the company is working hard to increase supply and meet customer demand as soon as possible.
All images courtesy of Tesla Inc.
Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.