Tesla Revamps The Megapack In Attempt To Reverse Its Declining Storage Business

Tesla is updating its utility-scale Megapack batteries arsenic it seeks to stem the decline of its lucrative power retention business.

The caller artillery merchandise known arsenic Megapack 3, which Tesla revealed precocious Monday, are a bid to lure utilities and information halfway developers that are hopeless for power. Megapack 3 stores astir 1 megawatt-hour much energy than Tesla’s largest existing offering and promises a longer lifespan.

Tesla besides introduced Megablock, a grouping of 4 Megapack 3 units that tin shop 20 megawatt-hours. The grouping should trim installation times by 23% and building times by up to 40%, nan institution said. Cells for nan artillery packs will beryllium originated from nan U.S., Southeast Asia, and China.

By updating nan thermal guidance system, Megapack 3 will beryllium capable to run from –40˚ F to 140˚ F, specs that should screen conscionable astir everyplace connected Earth.

Investors will person to hold a while to spot immoderate effect connected Tesla’s equilibrium sheet, though. Both products will beryllium manufactured successful Tesla’s Megafactory adjacent Houston and won’t participate accumulation until nan second half of 2026. 

Tesla’s power retention business could usage a changeable successful nan limb aft reporting two consecutive quarters of declining numbers this year. The institution was nan starring supplier of artillery power retention systems successful 2024, though its lead was slipping moreover then, according to Wood Mackenzie.

Meanwhile, nan remainder of nan power retention manufacture has been increasing swiftly.

The caller Houston mill will beryllium tin of producing up to 50 gigawatt-hours per twelvemonth of Megapack 3 and Megablock units. Last quarter, Tesla installed 9.6 gigawatt hours of stationary power storage.

Tesla’s star and power retention businesses would look to person a built-in customer successful CEO Elon Musk’s different company, xAI. The AI institution has added 168 Megapacks astatine its information halfway successful South Memphis, Tennessee, though it’s apparently exploring nan addition of much dozens much state turbines. No caller artillery additions person been reported.