Tesla Inc.'s (NASDAQ:TSLA) EV headlines often steal the show, but the real story this quarter isn't on four wheels — it's wired to the grid. Energy storage revenue exploded 44% year over year to $3.4 billion in the third quarter, now accounting for 12% of total sales, up from 9% a year ago.
Source: Tesla Q3 10-Q
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With Megapacks and Powerwalls scaling globally, Tesla is quietly transforming from a car company into a diversified energy powerhouse.
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Tesla’s Megapack Momentum
Tesla's utility-scale storage system, the Megapack, is the engine behind this surge. Utilities worldwide are increasingly deploying Megapacks to stabilize grids, integrate renewables, and meet ambitious carbon-reduction goals. While EV margins face cyclical pressure, energy storage growth has outpaced the company's overall revenue expansion, signaling a sustainable, high-margin business outside the auto cycle.
On the residential front, Powerwall adoption is climbing as homeowners embrace energy independence and solar integration. Combined with AI-driven energy optimization enabled by Tesla's ambitions for the Dojo supercomputer, these systems could soon orchestrate entire microgrids efficiently, creating recurring revenue streams for Tesla.
Analysts estimate that if Tesla continues on this trajectory, energy storage could surpass $10 billion in annual revenue by 2027 — a potential game-changer for the stock.
Tesla’s Strategic Hedge
Tesla's energy segment success isn't just about growth numbers; it's a strategic hedge against the cyclical swings of the auto market.
With AI, vertical integration, and global deployment scaling, energy storage is shaping up as Tesla's "next big thing," offering Wall Street a fresh narrative beyond EV deliveries and FSD hype.
A New Tesla Bull Case
While Tesla headlines remain dominated by Robotaxis, Optimus, and chips, energy storage is quietly powering the company's long-term upside.
For investors, the breakout in Megapacks and Powerwalls underscores a broader thesis: Tesla isn't just a carmaker — it's an AI-enabled energy infrastructure giant. And that could be the most compelling reason yet to watch this stock closely.
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