Commercial and residential energy storage sales and solar are currently only small slices of Tesla’s overall business, which is dominated by automotive. However, the Group’s 2Q20 results released in July showed some promise for energy storage, especially from Megapack, Tesla’s utility-scale energy storage product that launched in 2019 (modelled after the giant battery system Tesla deployed in South Australia). During July’s 2Q20 earnings call, CEO Elon Musk discussed the potential of the company’s Energy segment, highlighting that Tesla Energy has enormous growth potential, since the utility sector is far larger than the automotive market.
In May, reports surfaced that Tesla had applied to become an electricity supplier in the UK. A few weeks ago, Reuters reported that Tesla had acquired a licence that will allow it to trade electricity across Western Europe. Add to that Musk’s recent visit to Germany, it all seems to point to the company preparing for a push into that country’s energy market. Consultants and energy industry executives have also told Reuters that they believe it could set the stage for Tesla (possibly in partnership) to expand its business to Germany’s utility sector – a strategic move, since Germany is Europe’s largest power market.
More recently, investment bank, Piper Sandler, wrote in a research note that Tesla's energy segment is growing increasingly material. It added that it expects the energy business to reach more than $200bn p.a. in revenue, “particularly in the late 2020s and 2030s, as renewable energy grows toward 40% of electricity generation.” In FY19, Tesla Energy represented $1.5bn in revenue. Piper Sandler projects that by FY23, Tesla Energy will hit $12.4bn in revenue, crossing the $200bn revenue mark by 2033.
Tesla’s share price has soared over 430% YTD.
Written exclusively for Moore South Africa by Marco de Matos from
Anchor Research