When we think of Tesla, the first thing that comes to mind is its electric cars: from the elegant Model S to the affordable Model 3, including the futuristic Cybertruck and Roadster. And for good reason. Tesla's automotive division had a turnover of no less than $82 billion in 2023, representing the bulk of its revenue.
However, Tesla isn't just a car company. It's actually a technology company with a broader vision: to accelerate the world's transition to sustainable energy. And to achieve this, it's not enough to simply replace gasoline-powered cars with electric cars: we also need to change the way we generate, store, and consume energy.
Therefore, in addition to vehicles, Tesla develops three key business lines: car services, energy solutions, and large-scale batteries, the latter being one of the company's most promising strategic investments.
In addition to the automotive sector, Tesla generates around $8 billion annually in services related to its cars: maintenance, spare parts, chargers, insurance, and more. It's a stable business, but not as impressive as its third major line: the energy division, which already has a turnover of $6 billion annually and is growing year after year.
Within this division, the flagship product is the Megapacks: gigantic modular batteries designed to store energy on an industrial scale. Each unit can power thousands of homes for several hours and is key to stabilizing electrical grids with high penetration of renewable sources such as solar and wind.
While electric car sales are slowing down—due to factors such as the rise of credit, increasing competition, and saturation in some markets—the energy storage sector is growing at an exponential rate. The reason? The rise of renewable energy.
Renewable sources like solar and wind are intermittent: they produce electricity only when there is sun or wind. Therefore, they need efficient storage systems that allow excess energy to be stored and released when needed. This is where Tesla's Megapacks come in.
These types of batteries not only keep the electricity grid stable, but also reduce the need for polluting thermal plants during peak demand. In other words, they are the key to ensuring reliable clean energy.
The clearest example of this trend is China, the world leader in renewable energy. In 2024 alone, the country installed more than 300 GW of renewable power, roughly half of all installations worldwide. And, unsurprisingly, it needs batteries. Lots of them.
The Chinese government has announced that it expects to reach 40 GW of storage capacity by the end of 2025. This is equivalent to tens of thousands of Megapacks. Despite China having some of the world's largest battery manufacturers—such as CATL and BYD—demand is so high that there's room for everyone. That's why Tesla has decided to open a Megapacks megafactory in Shanghai, with the capacity to produce 10,000 units per year.
This strategic move allows Tesla to reduce costs, avoid tariffs, and position itself as a relevant player in the largest energy market on the planet.
Although Tesla remains, first and foremost, an automotive company, it is slowly building an energy empire in parallel. And it's doing so discreetly, without the spectacular headlines of its cars, but with potential that could even surpass its core business in the coming decades.
Although I'm very clear that I will never buy a Tesla car. Just thinking about the behavior of its creator makes my stomach churn.
Energy storage will be one of the pillars of the global electricity system of the future. And Tesla is well positioned to participate in this transformation.
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