Tesla's energy storage business rapidly growing in 2024

Tesla's electric car sales have faced challenges, but the company's energy storage business is thriving. This segment is experiencing rapid growth, even as overall automotive revenue declines. In 2024, Tesla deployed 31.4 gigawatt hours (GWh) of energy storage, a 114% increase from the previous year. The fourth quarter saw an even more dramatic rise, with deployment up 244%. Tesla’s energy storage products, like Powerwall for homes and Megapack for utilities, have become essential as they help stabilize energy grids and provide backup power. The energy generation and storage segment reached nearly $10.1 billion in sales and contributed more than 10% to Tesla's total revenue. Notably, this segment's gross profit is growing even faster than its sales, hinting at improved efficiency as it scales. Tesla has plans to boost its production capacity. A new factory in Shanghai, completed in December 2024, will ramp up production of its battery products. Tesla CEO Elon Musk has highlighted the importance of energy storage, expressing confidence in its potential and future demand. As Tesla continues to grow in this segment, analysts might need to reevaluate how it impacts the company's overall profitability. The success of the energy storage business could offer a significant boost to Tesla's financial outlook.