Tesla deployed 1.72 GWh of energy storage and 177 MW of solar energy in the first half

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Tesla said it deployed 1.72 GWh of energy storage products and 177 MW of solar energy systems through the first six months of 2021.

The company said in its quarterly earnings statement, issued July 26, that it is “focused on ramping production” of energy storage products, improving its Solar Roof installation capability and efficiency, and increasing market share of retrofit solar energy systems.

During the three and six months ended June 30, Tesla recorded total revenues of $11.96 billion and $22.35 billion. That represented increases of $5.92 billion and $10.33 billion, respectively, over the same periods ended June 30, 2020.

The company said that its energy generation and storage revenue rose by $431 million, or 116%, in the second quarter compared to the same period a year earlier. Energy generation and storage revenue rose by $632 million, or 95%, through the first half.

Tesla said the increases were primarily due to increases in deployments of solar cash and loan jobs, Megapack and Powerwall. The increases were partially were offset by reduced average selling prices on its solar cash and loan jobs as a result of a “low cost solar” strategy the company introduced partway through 2020.

Tesla reported that its cost of energy generation and storage revenue rose by $432 million, or 124%, in the second quarter compared against the same period in 2020. For the first half of the year, the same cost measure rose by $745 million, or 118%.

The company said the increases were primarily due to increases in deployments of solar cash and loan jobs, Solar Roof, Megapack and Powerwall, and increased service maintenance costs on solar energy systems where it was the lessor. The increases were partially offset by reductions in average costs per unit of Solar Roof and solar cash and loan jobs as deployments increased.

The company said that although its average cost per unit of Solar Roof improved, “they still remain significant and contribute disproportionately” to its cost of energy generation and storage revenue.

Lower gross margins

Gross margin for energy generation and storage fell from 6% to 2% in second quarter, compared to the same three months of 2020. And gross margin fell from 5% to -6% in the first half of the year. It said the decreases were primarily due to a higher proportion of Solar Roof in its overall energy business, which operated at lower gross margins as a result of temporary manufacturing underutilization during product ramp, increased service maintenance costs on solar energy systems where Tesla was the lessor, and lower gross margins in its energy storage business as it ramps its Megapack storage product.

The company said that while it continues to increase production of its energy storage products, production is “sensitive to global component constraints.” It said that for its Megapack product, energy storage deployments can “vary meaningfully” quarter to quarter depending on the timing of project milestones.

For its Powerwall product, better availability and growing grid stability concerns are driving customer interest. The company said it is “emphasizing cross-selling” with its residential solar energy products.

The company said it is working to improve its Solar Roof installation capabilities by hiring and training a “large number” of installers and reducing the installation time “dramatically.” Tesla said that as these product lines grow, it will have to maintain “adequate” battery cell supply for its energy storage products and “hire additional personnel, particularly skilled electricians,” to support the ramp of Solar Roof.

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