The Tesla Energy business experienced significant growth in 2023, surpassing $6 billion in revenue. This success was primarily attributed to the increased deployment of battery energy storage systems (BESS), while the solar arm faced challenges.
During Q4, Tesla Energy generation and storage revenues grew by 10% year-over-year to $1.438 billion, accounting for 5.7% of the total revenues. However, the cost of revenues totaled $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 reported 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 the previous year and exceeds the total volume 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 anticipates further growth in the BESS business in 2024, with the planned ramp-up of the new Megafactory in Lathrop, CA, towards full capacity of 40 GWh. Additionally, a plant in Shanghai is expected to come online in Q2 2024, potentially doubling the BESS segment production. The company may also consider building a similar plant in Europe.
Tesla offers three main types of ESS products:
- 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 surpassed 500,000 installations of its Powerwall product globally and unveiled the third generation, Powerwall 3.
Tesla Powerwall
Tesla Powerpack
Tesla Megapack
However, the solar business faced challenges in Q4, with deployments falling by 59% year-over-year to 41 megawatts (MW). The decline was attributed to high-interest rates causing a decrease in demand, negatively impacting profitability.
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 remains silent about the Solar Roof installation progress in its quarterly report. The Solar Roof is produced at Gigafactory 2 in New York.