Tesla makes as much money from selling one Megapack battery as it does from 100 EVs

Here’s a remarkable statistic, and one that may underline why Tesla boss Elon Musk often suggests that the company’s energy business might one day be worth more than its car business.

Some analysts now say – given the surge in interest in battery storage on the grid, and the downgrading of EV sale forecasts, particularly in the US market – that that moment might not be so far away

According to analysts at Morgan Stanley, Tesla earns as much revenue from the sale of a single Tesla Megapack battery – the equipment it uses for grid scale storage installations – as it does from the sale of 35 of its best-selling EVs.

Using US prices, analyst Adam Jonas says the price of a Megapack is around $US1.4 million, depending on the state, and the average price of its EVs is around $US40,000. But Megapack is also delivers a much higher margin than the EV sales, at around 20 per cent versus 7 per cent for the car.

That means that the operating profit of a Megapack equates to that of around 100 of its EVs, and one Megapack factory that produces 10,000 units would deliver the same operating profits as an EV gigafactory that made one million EVs.

Jonas cited the numbers in his latest valuation of Tesla Energy, which he has now boosted from around $US130 billion to $US183 billion ($A271 billion), which is more than any listed Australian company. And that is a big number to put on a company division making technology that one half of Australia’s political divide believes does not exist.

The big revaluations follow the recent reveal by Tesla that it posted sales of 9.4 gigawatt hours of storage in its latest quarter, well ahead of analyst expectations. Morgan Stanley now believes the company will reach annual deployments of 100 gigawatt hours by 2028, instead of 2031 as it had previously forecast.

It says that if its own prediction of 140 GWh of annual battery deployments in 2030 is correct, that will equate to around 30 per cent of the global battery storage market.

Battery storage is now running well ahead of most market predictions, mostly because of its falling costs and because it has proven to be reliable, flexible, modular, and easy to build – while its competing technology such as pumped hydro is looking difficult and facing rising civil construction costs.

Just to be clear, while Morgan Stanley now values the energy division around the same as the car business, the mobility aspect (ride share and robotaxis), and Tesla’s “network” components both get much high valuations, around double those of batteries and cars.