Tesla Energy Storage & Solar Profits Nearly Quadrupled in 2023

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The big headlines out of the Tesla conference call that just took place are that Tesla sales growth is slowing down. However, that was basically expected and I’ve talked about it at length in recent months. Then there’s also the note that the Tesla Model Y was the best selling vehicle in the world in 2023, but I’ve written about that several times as well. What jumped out to me from the shareholder letter was that Tesla’s energy generation and energy storage business is booming. That said, there’s some nuance to this.

According to the company, profits from its energy generation and storage division nearly quadrupled in 2023 compared to 2022. Energy storage deployments more than doubled in that timeframe, reaching 14.7 GWh in 2023.

“Energy storage deployments decreased sequentially in Q4 to 3.2 GWh, for a total deployment of 14.7 GWh in 2023, a 125% increase compared to 2022. While we expect deployments will continue to be volatile on a sequential basis, impacted by logistics and the global distribution of projects at any given time, we expect continued growth on a trailing twelve-month basis going forward. We continue to ramp our 40 GWh Megafactory in Lathrop, CA toward full capacity,” Tesla writes.

However, the solar side of the business is decidedly not booming. “Solar deployments declined on a sequential and YoY basis to 41 MW. Downward pressure on solar demand continued into Q4 as interest rates have remained high. Profitability in the quarter was negatively impacted by lower deployments and seasonal weakness in solar energy generation.”

Again, I find it a little odd that Tesla lumped storage and solar together in highlighting their combined profit growth, when its just storage that grew while the solar business declined. Though, the company has historically combined these much of the time in reporting, so perhaps that’s the reason.