Musk said in a post on X on Thursday that Tesla is ramping production of Megapacks “as much as possible.”
- In the third quarter, Tesla deployed 13.7 GWh of energy storage, its second-best quarter on record.
- Gross margins for the energy segment improved sharply to 33.1% in Q3 from 20.4% in the second quarter.
- On Tesla’s earnings call, Musk and CFO Vaibhav Taneja highlighted extreme demand from AI data centers.
Tesla (TSLA) CEO Elon Musk said on Thursday that the company is “increasing production of Megapacks as much as possible” to meet strong energy storage orders that have left nearly all 2027 capacity sold out before the year begins.
Tesla Energy Segment Scales In Q3
In the third quarter, Tesla deployed 13.7 GWh of energy storage, its second-best quarter on record. Energy generation and storage revenue reached $2.88 billion, though this was down 16% year-over-year partly due to tariff-related customer refunds. Gross margins for the segment improved sharply to 33.1% from 20.4% in the second quarter, supported by higher selling prices and warranty adjustments.
On the earnings call, Musk and CFO Vaibhav Taneja highlighted extreme demand from AI data centers, which require rapid, reliable power and storage solutions. The company reported its highest-ever order rate and backlog for energy storage products in the quarter. Musk noted Tesla is “almost sold out of all Megapacks for 2027” and expects gross margins on the business to increase meaningfully as production scales.
Tesla is addressing the surge by expanding Megapack manufacturing. Megapack is a large-scale, utility-grade battery energy storage system, capable of storing up to several megawatt-hours of energy per unit.
Tesla’s new Texas Megafactory began production in Q3 with a planned annual capacity of 50 GWh, joining facilities in California and Shanghai for a combined nameplate capacity of roughly 110 GWh.
Earlier today, Morgan Stanley raised the price target on TSLA to $410 from $400, citing improving energy fundamentals, among other reasons.
How Did TSLA Retail Traders React?
On Stocktwits, retail sentiment around TSLA stock jumped from ‘neutral’ to ‘bullish’ territory over the past 24 hours, while message volume stayed at ‘high’ levels.
TSLA stock has dropped 17% year-to-date.
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