Tesla’s energy storage business is growing faster than any other part of the company

Tesla’s vigor retention concern saved a dismal net study from turning into a horrible one.

Last year, the company’s nett fell 45% compared with 2024, driven successful ample portion by falling income of its electrical vehicles. Investors anticipated the diminution successful sales, but Tesla inactive bushed Wall Street net and gross estimates acknowledgment to its vigor retention business.

Tesla deployed a grounds 46.7 gigawatt-hours of vigor retention products successful 2025, a 48% summation from past year, according to the company’s authoritative filings.

Big, stationary batteries similar the Megapack and Powerwall, on with star installations, present thrust astir a 4th of Tesla’s gross profit. Last 4th alone, the Megapack contributed $1.1 cardinal of the retention business’s $3.8 cardinal successful gross nett for the full year. Storage and vigor procreation revenues were up 26.5% to $12.8 billion.

Those batteries and star panels are besides precise profitable, with a gross borderline of 29.8%, astir treble what Tesla earns selling cars and trucks.

Storage volition apt play a larger relation successful the company’s adjacent future, too.

Large vigor retention projects, similar those installed for utilities oregon information centers, thin to beryllium milestone-based, and gross from the projects is recognized erstwhile definite milestones are achieved. In its 10-K filing with the SEC, Tesla said it expects to admit $4.96 cardinal this twelvemonth successful deferred gross from projects already underway. That’s much than treble what the institution recognized successful deferred gross from retention projects successful 2025.

Some hurdles prevarication ahead, though.

The One Big Beautiful Bill Act (OBBBA) phased retired taxation credits for residential vigor retention systems similar the Powerwall, though commercialized taxation credits for the Megapack and Megablock products volition proceed done the mid-2030s. Tariffs and provisions successful the OBBBA besides endanger to summation artillery compartment prices, the institution said. Sales were up due to the fact that volumes were up, but the mean selling terms of a Megapack was down, suggesting accrued contention successful vigor retention market.

Yet overall, Tesla remains optimistic astir the retention business.

“Despite these challenges, arsenic AI infrastructure drives accelerated load growth, we spot opportunities for our vigor retention products to stabilize the grid, displacement vigor erstwhile it is needed astir and supply further powerfulness capacity,” the institution said successful its net report.