Tesla's Hidden Powerhouse: EV Giant Tries To Shift Investor Focus To Energy Business Amid Auto Slowdown

Zinger Key Points
  • While Tesla's automotive segment remains its primary revenue source, the company is actively seeking to bolster revenues from other segments
  • Some analysts have highlighted the significant potential for Tesla in the energy and energy storage segments amidst the slowdown in EV sales
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As the electric vehicle (EV) giant Tesla Inc. TSLA grapples with dwindling EV demand, it is now seemingly redirecting investor attention towards its other segments, particularly energy storage.

What Happened: Tesla reported on Tuesday the quantity of energy storage products deployed in the quarter alongside its vehicle delivery and production numbers. This marks a departure from the company’s previous practice of reserving reporting on its energy storage segment for its quarterly financial report, rather than the delivery report.

Tesla disclosed that it deployed 4,053 MWh of energy storage products in the quarter, representing its highest quarterly deployment to date and a year-on-year increase of 4.2%. This comes after the deployment of only 3,202 MWh of energy storage in the last quarter of 2024.

However, vehicle deliveries in the first quarter declined by 8.5% to 386,810 vehicles compared to the same period last year. The company attributed this decline partly to the production ramp of its refreshed Model 3, the arson attack on its gigafactory in Berlin, and supply chain disruptions resulting from the conflict in the Red Sea.

Why It Matters: While Tesla’s automotive segment remains its primary revenue source, the company is actively seeking to bolster revenues from other segments such as energy storage and robotics.

Some analysts have highlighted the significant potential for Tesla in the energy and energy storage segments amidst the slowdown in EV sales. However, more pessimistic commentators have raised doubts about whether this represents genuine opportunity or merely hype, especially considering the perceived overvaluation of the company’s stock.

Tesla’s energy generation and storage segment recorded a revenue of $1,438 million in the fourth quarter, a 7.8% decrease from the previous quarter. However, over the year, the segment amassed revenues of $6,035 million, indicating a 54% increase from 2022.

In January, the company expressed expectations for the growth rate of deployment and revenue in the energy storage business in 2024 to surpass that of the automotive sector. Tesla acknowledged that deployments may be subject to volatility and impacted by logistics and global product distribution. Nevertheless, it remains optimistic about continued growth on a twelve-month basis.

Check out more of Benzinga's Future Of Mobility coverage by following this link.

Read More: GM’s Total EV Sales In Q1 Can’t Even Match Tesla’s High-End Deliveries

Photo courtesy: Tesla

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