Why Tesla Might Build A Megawatt Battery In Texas

Tesla Inc TESLA might be building a battery to support a Texas power grid under its subsidiary Gambit Energy Storage LLC.

What Happened: Tesla is constructing a 100-megawatt battery connected to the Angleton, Texas, electric grid to store solar and wind energy according to a report by Bloomberg. The battery project, which would be able to power over 20,000 homes, is so far being kept secret, but construction workers were seen wearing Tesla logo hats. Bloomberg also found public documents confirming Gambit Energy was involved. Gambit Energy shares the same address as a Tesla facility in Fremont, California, and is registered with the Electric Reliability Council of Texas (ERCOT).

Why It Matters: Tesla CEO Elon Musk, who recently moved to Texas, chided the ERCOT last month on Twitter after more than 26 million people were left without power following the storms that swept across the state.

This new energy storage project aligns with Musk’s long-time plan to expand Tesla’s business in renewable energy and follows a solar panel installation project seen taking place at a Fremont testing facility on March 2.

“I think long-term Tesla Energy will be roughly the same size as Tesla Automotive,” Musk said back in July 2020 on an earnings call. According to analyst Alexander Potter of Piper Sandler, Tesla Energy could represent up to 30% of the company’s total revenue by the 2030s, up from roughly 6% today.

What’s Next: “Tesla’s mission is to accelerate the world’s transition to sustainable energy.” according to its website, and investors may see the company known for its electric vehicles focus more on energy over the coming years.

“The energy business is collectively bigger than the automotive business,” Musk said.

Tesla and PG&E Corporation PCG are currently working on a 182.5-megawatt system in the San Fransisco Bay area that is estimated to be operational by August.

The new project has an estimated operation start date of June 1, according to Warren Lasher, senior director of system planning at ERCOT.

(Photo by Casey Horner on Unsplash)