Tesla announces third Megafactory as competition heats up
Elon Musk announced that Tesla is already building a third Megafactory to produce more Megapacks just as the competition in the energy storage space heats up
Energy storage was Tesla’s silver lining this quarter.
While its main business, the automotive business, shrank in both revenue and margins, its energy storage business grew more than 100% year-over-year – having deployed 31.4 GWh versus 14.7 GWh in 2023.
That’s mainly due to its Megapacks, its popular utility-scale energy storage systems, and the production ramp at its Megafactory in California, where it produces those battery packs.
Tesla also recently completed construction at its second Megafactory, this one in Shanghai, China, and now, the company revealed that it is building a third Megafactory.
CEO Elon Musk said during the conference call following the release of its Q4 2024 financial results yesterday:
So, we have our second factory, which is in Shanghai, that’s starting operation, and we’re building a third factory. So, we’re trying to ramp output of the stationary battery storage as quickly as possible.
The CEO didn’t say where Tesla is building this new factory or what he meant exactly by “we’re building”. It’s unlikely that the factory is in construction.
Tesla announced an annual planned capacity of 40 GWh for each of the first Megafactory.
While Tesla’s growth in energy storage has been nothing short of impressive, it has been fueled partly by price cuts lately.
Over the last year, Tesla decreased the price of the Megapack from $1.5 to $1 million. Tesla is highly opaque with its financial results and doesn’t break down its revenue and costs per model or product.
It bundles all its energy business together, solar and storage. However, we do know that Tesla’s solar business now accounts for a small fraction of its overall energy business.
If we breakdown Tesla’s reported energy deployment compared to revenue and costs, we can see that Tesla’s profits per GWh deployed hit a record low for the year last quarter:
| Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | |
| Deployment in GWh | 4.1 GWh | 9.4 GWh | 6.9 GWh | 11 GWh |
| Revenues in billions | $1.635 | $3.014 | $2.376 | $3.061 |
| Cost in billions | $1.232 | $2.274 | $1.651 | $2.289 |
| Profits per GWh in billions | $0.098 | $0.079 | $0.105 | $0.070 |
That’s happening as competition is heating up and gunning for Megapacks, which is still clearly the market leader.
Tesla doesn’t produce its own battery cells to make Megapacks, and two of Tesla’s main battery cell suppliers, BYD and CATL, have recently released products to compete with Tesla’s Megapacks.
While demand still outpaces global energy storage production, Tesla might have to reduce prices further to keep being able to grow this segment of its business.
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On today’s sunny side up episode of Quick Charge, we take a look at the latest from the world of solar power, and discuss Congressional Republicans’ plans to limit your energy independence by eliminating a critical tax credit for homeowners nearly ten years early. (!)
We’ve also got a quick review of a massive solar farm powering 200,000 homes in Indiana and the biggest solar project East of the Mississippi – both part of a record 98% of all new power generation and grid capacity introduced in 2025 coming from wind and solar. Those are jobs, those are lower utility rates, those are energy independence … so why are Congressional Republicans working to make that more expensive?
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If you want to read that EnergySage report on the state of the home solar industry, including news about battery energy storage system and V2H/V2G prices and financing trends, you can check it out for yourself, below, then let us know what you think in the comments.
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If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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A Waymo autonomous vehicle drives along Masonic Avenue on April 11, 2022 in San Francisco, California.
Justin Sullivan | Getty Images News | Getty Images
Alphabet’s Waymo unit has received approval to expand its autonomous ride-hailing service to more parts of the San Francisco Bay Area, including San Jose.
In March, the company submitted a request to the California Public Utilities Commission to gain approval for its latest passenger safety plan, a key step in gaining permission to operate driverless vehicles across a broader area. On Monday, the proposed expansion was approved, allowing for Waymo’s driverless coverage to extend from San Francisco down through the Peninsula.
“We’re very excited to share that the CPUC has approved our application to operate our fully autonomous commercial ride-hailing service in the South Bay and nearly all of San Jose!” the company wrote in a post on X on Monday. “While this won’t change our operations in the near-term, we’re looking forward to bringing the benefits of Waymo One to more of the Bay Area in the future.”
The $5 billion Empire Wind is back in business. The Trump administration’s Bureau of Ocean Energy Management (BOEM) has lifted its stop-work order for Empire Wind, a major offshore wind project off the coast of New York led by Empire Offshore Wind LLC, a subsidiary of Equinor. Construction is now allowed to resume.
Equinor CEO Anders Opedal welcomed the news, saying the restart reinforces Equinor’s commitment to delivering clean energy while supporting local economies and saving thousands of jobs. He also credited a wide coalition of officials for helping get the project back on track, including Trump, New York Governor Kathy Hochul, and congressional leaders like Senator Chuck Schumer and Representative Dan Goldman. Opedal also thanked the Norwegian prime minister and the minister of finance for raising the issue with the US administration.
Governor Hochul said in a statement that “countless conversations with Equinor and White House officials” had taken place.
Neither the BOEM nor the Department of the Interior has issued a comment.
The Trump administration halted construction of the 54-turbine Empire Wind on April 16, but discussions between Equinor, regulators, and leaders at the federal, state, and city levels led to a reversal. That means Empire Wind can now push ahead with its goal of powering 500,000 New York homes with offshore wind energy.
“This project delivers on the energy ambitions shared by the US and New York by providing a vital new source of power to the region,” said Molly Morris, president of Equinor Wind US. She added that Empire Wind is boosting supply chain investments across the country, with activity in New York, Louisiana, Pennsylvania, Texas, and South Carolina.
Equinor plans to reassess the project’s financials in the second quarter. The goal is still to install turbines offshore in 2025 and hit full commercial operation by 2027. The company says it will work with suppliers and regulators to minimize any delays from the month-long pause.
Empire Wind was first awarded its offshore lease in 2017 after a competitive federal process. It received its final construction green light in early 2024 following an extensive environmental review. Construction kicked off shortly after, and the project is now over 30% complete.
The US is a major market for Equinor. The Norwegian energy giant says it has invested around $60 billion in US energy projects since the early 2000s, more recently in low-carbon solutions, critical minerals, and renewables. Empire Wind is one of its flagship projects in the US.
Read more: Trump admin halts $5 billion NY offshore wind project mid-build
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
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