In the aftermath of the recent Tesla conference call, the predominant headline revolves around the deceleration in Tesla’s sales growth, a trend anticipated and extensively discussed in recent months. While the Tesla Model Y’s distinction as the best-selling vehicle in the world in 2023 has been previously highlighted, an overlooked revelation in the shareholder letter points to the exponential surge in Tesla’s energy generation and storage business.
Tesla reports a remarkable surge in profits from its energy generation and storage division, nearly quadrupling in 2023 compared to the preceding year. Particularly, energy storage deployments witnessed an impressive increase, more than doubling to reach 14.7 gigawatt-hours (GWh) in 2023.
In the shareholder letter, Tesla outlines, “Energy storage deployments decreased sequentially in Q4 to 3.2 GWh, for a total deployment of 14.7 GWh in 2023, a 125% increase compared to 2022. While we expect deployments will continue to be volatile on a sequential basis, impacted by logistics and the global distribution of projects at any given time, we expect continued growth on a trailing twelve-month basis going forward. We continue to ramp our 40 GWh Megafactory in Lathrop, CA toward full capacity.”
However, in contrast to the booming energy storage sector, Tesla’s solar business faced challenges. Solar deployments experienced a decline both sequentially and year-over-year, dropping to 41 megawatts (MW). The downward pressure on solar demand persisted into Q4, attributed to sustained high-interest rates. The quarter’s profitability was adversely affected by lower solar deployments and seasonal weakness in solar energy generation.
It is noteworthy that Tesla combined the storage and solar components in highlighting their overall profit growth, even though it is the storage segment that exhibited significant expansion while the solar business faced a downturn. This bundling of storage and solar figures aligns with Tesla’s historical reporting practices, providing a comprehensive view of its renewable energy endeavors.
