Tesla's Energy Storage Business Sees Triple-Digit Growth

Tesla's energy storage segment is booming with triple-digit growth, while its automotive business faces declining revenue. Investors are urged to focus on this promising area as it can significantly enhance Tesla's profitability.

Date: 19-03-2025

AI Rating: 7

Triple-Digit Growth in Energy Storage
In 2024, Tesla's energy storage capacity deployment surged by 114% year over year, highlighted by a staggering 244% growth in Q4 alone. This rapid expansion showcases the immense demand for Tesla's energy storage solutions like Powerwall and Megapack, overshadowing the struggles in its automotive business.

Revenue Growth
The revenue from Tesla’s energy generation and storage segment grew by 67% year over year in 2024, supported by the strong performance of energy storage products. This growth was significant despite challenges in the solar product category.

Segment Contribution
In 2024, the energy generation and storage business contributed nearly $10.1 billion, representing over 10% of Tesla's total revenue. This ascent not only underlines the importance of this segment to Tesla's overall operation but also indicates a positive trend for future profitability.

Operating Leverage and Margins
The segment exhibited notable operating leverage as sales outpaced costs, with the cost of goods sold rising by only 52% compared to a 67% sales increase. Such margin expansions hint at an even stronger performance from Tesla's energy storage products themselves.

Future Prospects
Tesla's strategic investments in scaling its energy storage business, including a new factory in Shanghai, reflect CEO Elon Musk’s confidence in the segment’s potential to drive future profitability. Demand is expected to remain high as energy storage capabilities are increasingly recognized as essential.

Stocks: TSLA