Tesla proudly disclosed in its Q4 and FY 2023 Update that its energy business grew to more than $6 billion last year, primarily boosted by the company’s battery energy storage system (BESS) deployment.
The Musk-led company indicated that its energy generation and storage business enjoyed a revenue increase of 10% year-on-year to $1.438 billion in Q4 2023, accounting for 5.7% of its overall revenues. Meanwhile, the cost of revenues reportedly totaled to $1.124 billion.
Tesla Energy Storage deployment
Tesla’s BESS deployment recorded a whopping 30% YoY growth to 3,202 megawatt-hours (MWh) or 3.2 gigawatt-hours (GWh) in the fourth quarter of 2023.
As for the full year, total deployment grew by 125% YoY to more than 14.7 GWh. Impressively, this figure is higher even if we combine Tesla’s BESS deployment in 2020, 2021, and 2022.
| Period | Deployment | YoY Change |
| Q4’2023 | 3,202 MWh | up 30% |
| Q1-Q4’2023 | 14,724 MWh | up 125% |
It is worth noting that Tesla currently sells three main types of BESS products: the Powerwall 3, Powerpack, and Megapack.
| Application | Capacity | |
| Megapack | Home | 13.5 kWh / 11.5 kW of continuous power output |
| Megapack | Commercial | Up to 232 kWh / Up to 130 kW per unit |
| Megapack | Utility-scale | 3 MWh units the largest project by utilities |
Tesla Solar installations
In contrast to Tesla Energy’s remarkable growth, Tesla Solar continues to suffer from declining volume.
According to the report, Tesla Solar hit its lowest level since early 2020 at 41 megawatts (MW) in the fourth quarter. It indicated a YoY decline of an astounding 59%.
| Period | Deployment | YoY Change |
| Q4’2023 | 41 MWh | down 59% |
| Q1-Q4’2023 | 223 MWh | down 36% |
Tesla attributed the poor performance to the increase in interest rates and the seasonal weakness in solar energy.
“Downward pressure on solar demand continued into Q4 as interest rates have remained high. Profitability in the quarter was negatively impacted by lower deployments and seasonal weakness in solar energy generation.”
Tesla
Optimistic forecast
Tesla made an optimistic forecast for its BESS business this year as it persists in bringing the new Lathrop Megafactory to its full potential of 40 GWh capacity.
“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.”
Tesla
As noted by Recharge, Tesla’s storage business growth aligns with Chief Elon Musk’s previous remarks that it will surpass the company’s automotive business this year.
“I said for many years that the storage business would grow much faster than the car business, and it is doing that.”
Tesla
It would not be surprising if Tesla’s Energy Storage business actually surpasses the vehicle volume growth rate this year. Tesla warned investors that there may be “notably lower” growth in 2024 due to the ongoing development of its next-gen platform.
