Tesla’s energy storage and generation revenues have tripled since 2020, largely driven by its growing deployments of the company’s Megapack battery storage systems.

The California-headquartered technology company reported its Q4 and full-year 2023 financial results yesterday. It said energy storage deployments for last year totalled 14,724MWh, which is a company record.

It’s also more than double the 6.5GWh of storage deployments Tesla reported for 2022. It’s also nearly 10x the 1,651MW of storage deployments recorded by the company in 2019. For context, Germany’s total cumulative installs as of the end of 2022 stood at 6.5GWh across all market segments, rising to 11.2GWh by the end of last year.

CEO Elon Musk noted in an analysts’ call to discuss results that he has been saying for some time – as reported by Energy-Storage.news – that Tesla Energy could be expected to grow at an even faster rate than the automotive business, “…and it is doing that,” Musk said.

Along with next-generation electric vehicles (EVs) and self-driving EVs, energy storage will be among the key offerings driving Tesla’s “next growth wave,” according to the CEO. In reporting for Q3 2023 a few months ago, Musk had said energy is becoming Tesla’s “highest margin business,” and a bright spot in what was otherwise a fairly downbeat quarter.

Something else Musk has said in the past, is that demand is such that Tesla’s battery products sell out as they come off the production line.

The company has built a dedicated factory in Lathrop, California, to cater to that demand. Another company executive on the call, whose name wasn’t given, said that: “Megapack continues to see strong demand signals globally, driving consistent growth trajectory through ’24 and ’25.

The exec said that the ramp-up of Lathrop is underway and will continue through this year, for Tesla to reach 40GWh of annual Megapack production capacity, doubling its current 20GWh annual production capability by the end of 2024.

Deployments did see a bit of a dip sequentially: 3,202MWh deployed in Q4 last year represented a 30% decrease compared to Q3 2023. The company said it expected to see some volatility in deployments on a sequential basis, which could be impacted by “logistics and the global distribution of projects at any given time”. Nonetheless, year-on-year, the Q4 2023 figure compares favourably to the 2,462MWh recorded in Q4 2022.

That said, when it comes to the energy business, batteries are doing the heavy lifting in contributing. Tesla’s solar business continues to shrink.

It made just 41MW of deployments during Q4 2023, the lowest of any quarter last year, while no quarter in 2023 even got close to Q4 2022’s 100MW of installs. Put into year-on-year context (see chart below), the difference is stark.

Chart: Jonathan Touriño Jacobo for Solar Media using figures from Tesla’s financial release.