The Tesla Energy business expanded in 2023 to over $6 billion, mostly thanks to the battery energy storage system (BESS) deployment, as the solar arm is struggling.
According to the company, in Q4, Tesla Energy generation and storage revenues increased by 10% year-over-year to $1.438 billion (5.7% of the total revenues), while the cost of revenues amounted to $1.124 billion.
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Tesla BESS sales doubled in 2023
In 2023, Tesla deployed almost 15 gigawatt-hour (GWh) of battery energy storage systems (BESS), which is 125% more than in 2022. The main BESS products are the utility-scale Megapack containers and Powerwalls for homeowners.
Tesla Energy Storage – Q4 2023
Tesla reports that in Q4 its BESS deployment increased by 30% year-over-year to 3,202 megawatt-hours (MWh) or 3.2 gigawatt-hours (GWh). In 2023, the volume exceeded 14.7 GWh, which is 125% more than a year ago. Actually, it's more than in 2020, 2021 and 2022 combined.
While the 2023 BESS volume is relatively high, it's "just" equivalent to about 150,000 all-electric cars with 100-kWh battery packs—not even a tenth of the total EV battery volume.
Tesla battery energy storage system deployment last quarter (YOY change):
- Q4'2023: 3,202 MWh (up 30%)
- Q1-Q4'2023: 14,724 MWh (up 125%)
Tesla says that further growth of the BESS business is expected in 2024, as the company continues to ramp its new Megafactory in Lathrop, CA (announced in 2021) toward full capacity of 40 GWh: "While we expect deployments will continue to be volatile on a sequential basis, impacted by logistics and the global distribution of projects at any given time, we expect continued growth on a trailing twelve-month basis going forward. We continue to ramp our 40 GWh Megafactory in Lathrop, CA toward full capacity."
As we reported previously, another such plant in Shanghai—capable of producing potentially around 40 GWh/year (assuming around 10,000 Megapack units)—is expected to come online in Q2 2024, so the BESS segment should quickly expand. It is highly probable that Tesla will build a similar plant in Europe at some point in the future.
Tesla offers three main types of ESS products (all numbers tentative/might change with future product iterations):
- Powerwall 3 for home installations (13.5 kWh / 11.5 kW of continuous power output)
- Powerpack for commercial installations (Up to 232 kWh / Up to 130 kW per unit)
- Megapack (3 MWh units the largest project by utilities)
In mid-2023, Tesla Powerwall installations surpassed 500,000 units globally, while the company officially launched the third generation of the product, which is called Powerwall 3.
Tesla Solar – Q4 2023
However, in the case of the solar business (conventional panels and Solar Roof), the results continue to decrease.
In Q4, the volume decreased by 59% year-over-year to 41 megawatts (MW), the lowest level since early 2020 and lockdowns.
The official explanation is that "Downward pressure on solar demand continued into Q4 as interest rates have remained high. Profitability in the quarter was negatively impacted by lower deployments and seasonal weakness in solar energy generation."
Tesla solar (conventional panels and Solar Roof) deployment last quarter (YOY change):
- Q4'2023: 41 MWh (down 59%)
- Q1-Q4'2023: 223 MWh (down 36%)
Tesla's solar solutions:
Solar Roof
Tesla remains silent in its quarterly report about the Solar Roof installation progress. The Solar Roof is produced at Gigafactory 2 in New York.
