Though its EV business is contracting, Tesla’s energy storage segment is growing fast, helping it reap the benefits of surging demand for batteries.
By Dan McCarthy, Canary Media
Tesla may be struggling when it comes to electric vehicle sales, but its energy storage business is on a serious upswing.
In the second quarter of this year, Tesla deployed 9.4 gigawatt-hours of battery storage, a record for the firm and more than double its deployment in Q2 of last year. Revenue from the firm’s energy generation and storage segment doubled year over year to just over $3 billion in the quarter, contributing nearly 12 percent of Tesla’s revenue for the period; in Q2 of last year it accounted for just 6 percent of revenue.
“This is growing faster than anything else,” Tesla CEO Elon Musk said of the energy storage business, which sells both residential and utility-scale battery products, during the company’s Q2 earnings call.
The strong storage growth is helping the firm weather a difficult time for its EV business.
Its automotive revenue dropped by 7 percent year over year in Q2 and is down by more than 10 percent through the first half of the year. Vehicle production and deliveries also slipped both this quarter and last. The company’s profits plunged 45 percent year over year, despite record-high quarterly revenue.
Tesla’s turbulence comes as EV sales climb to record heights both globally and in the U.S., despite recent analysts’ concern about a potential contraction for the overall market. The EV pioneer faces increasing competition both on the global stage from the likes of Chinese EV giant BYD, which briefly dethroned Tesla as the largest EV maker in the world late last year, and in the U.S. from traditional automakers like Ford, General Motors, Kia, Hyundai, and BMW.
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