Tesla energy storage deployments down 15% on ‘clumpy’ first quarter

After peaking at over 14 GWh and accounting for 15% of Tesla’s revenue in the fourth quarter of 2025, energy storage saw a seasonal decline to 8.8 GWh accounting for 10.8% of the company’s revenue.

April 24, 2026 John Fitzgerald Weaver

Arevon's Eland solar-plus-storage project.

Image: Tesla

Tesla’s energy division continues to grow in importance at the company, though deployments fell 35% at the start of the year amid “clumpy” first quarter numbers. The division deployed 8.8 GWh of storage and earned $2.4 billion in revenue. Gross profit for the division touched nearly 40%.

Company representatives said on the earnings call they still expect the year as a whole to surpass 2025’s total capacity deployment of 46.9 GWh.

The energy division reported hardware inventory with costs of $3.5 billion. If this inventory consists mostly of Megapacks at $150/kWh costs, it would suggest more than 20 GWh manufactured but not yet delivered to customers.

Looking forward, the company has a $10.15 billion backlog of energy-related revenue. Tesla expects $5.02 billion of it to be recognized within 12 months, with the rest afterwards. If the backlogged revenue represented Megapacks priced at $250/kWh, it would equate to a 45 GWh pipeline of orders. The $3.5 billion of product held in inventory is expected to feed the pipeline.

The $2.4 billion in revenue for the energy division is the lowest in almost two years. It follows the fourth quarter of 2025 which saw energy revenue peak at just over 15% of the company’s overall revenue on record capacity deployments. The first quarter’s share fell to 10.8%.

The energy division’s gross margin has consistently exceeded the company’s overall gross margin profits as a whole since the third quarter of 2023.

While the company posted a record gross profit, the figure was boosted by a $250 million one off tariff refund. Without the refund, profit would have been in line with the past four quarters. That said, it should be noted that those past quarters would likely have shown higher profit margins if not for tariffs.

Tesla “recognized $87 million of revenues and $65 million of cost of revenues from SpaceX” for Megapack purchases. This represented about 3.6% of total energy storage revenue. The gross profit on the hardware was just over 25%, 5 percentage points lower than the department’s standard margin, which blends many product lines.

In the company’s slidedeck, they listed Tesla’s energy storage manufacturing facilities. The Shanghai plant is stated to eventually scale to a 40 GWh; however, it is currently noted as a 20 GWh facility.

The company also noted that the Megapack 3 manufacturing facility in Houston, Texas will open later in 2026. It is projected to manufacture up to 50 GWh of capacity per year.

As in most recent quarterly reports, Tesla did not discuss solar in the conference call and only sparingly referenced it in the investor slides. The company mentioned its new solar panel; however, it did not address their massive 100 GW manufacturing plans.

One investor asked what Tesla is doing to scale the energy generation business with solar.

Michael Snyder, Vice President of Energy & Charging, responded that the company sees strong demand “shaping up” for the second half of the year. He noted that Tesla introduced a lease product that allows the company to capture the tax credit. Snyder also mentioned Tesla’s “fully integrated home energy ecosystem”. There was no mention of the solar roof.

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