Tesla expected to grow energy business to same size as automotive division
Image credit: Tesla
In its latest earnings call, Tesla signalled its intention to invest more resources in its solar and energy products.
Elon Musk, the firm’s CEO, said he anticipates its energy branch to eventually grow or even outgrow the size of the company's automotive division. Further signals sent via the latest third-quarter update, published on Wednesday, corroborated Musk's ambition.
In July, Tesla introduced the Megapack, an all in one system with 3MWh battery pack that arrives pre-assembled and pre-tested in one enclosure and delivered from its Gigafactory. It includes battery modules, bi-directional inverters, a thermal management system, an AC main breaker and controls. Users are promised they will have nothing else to do beyond simply connecting the Megapack’s AC output to their site wiring.
The marketing for Megapack suggests that it needs 40 per cent less space and 10 times fewer parts than current systems on the market, reducing the time it takes to install the high-density, modular system compared to conventional systems.
In its Q3 2019 update, the company also mentioned the recent launch of its commercial solar configurator for small and medium enterprises with “standardised and transparent pricing”.
The company's total revenue amounted to $6.3bn in the third quarter. Despite not breaking out revenues generated from solar, energy storage or other products and services, a small share is currently earned from the category 'energy generation and storage'.
Tesla reportedly deployed 43MW of solar energy, an increase of 43 per cent on the previous quarter.
Another sign that greater attention is now being paid to its energy storage and solar business is the promotion of Kunal Girotra, who initially joined Tesla in 2015 as a senior product manager for Powerwall. Girotra moved up to become the senior director of the company’s energy operations.
In its investor update, the company added that its energy storage deployment reached an all-time high of 477MWh in the third quarter.
The company surprised Wall Street with a profit in this quarter, having recorded losses in the two previous quarters. Progress in its automotive division helped, where the business improved its gross margins - a sign of financial health. The news comes after last week's announcement that Tesla was given permission by the Chinese government to build cars in China.
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