Home and grid batteries sell out as Tesla gears up to launch new car

Source: Umair Irfan, E&E reporter • Posted: Friday, August 7, 2015

For Tesla Motors Inc., stationary energy storage is shaping up to be a big part of its business.

The company introduced a home battery storage system, Powerwall, and a larger, utility-scale storage unit called Powerpack, in April (ClimateWire, June 10).

“The demand has been really crazy. It’s well over a billion dollars” of reservations, said Tesla CEO Elon Musk yesterday during a quarterly earnings call. “We’re basically sold out of what we can make in 2016 at this point.”

Storing electricity, whether on the grid or in homes, has value beyond smoothing output from intermittent renewables, Musk observed. Large batteries on the electric grid can respond faster than generators and give utilities the opportunity to rethink the grid, allowing them to build generation and transmission to meet average demand instead of peak demand.

In homes, batteries make the most sense in regions like Germany and Australia with time-of-use electricity prices that fluctuate with demand, Musk said.

Earlier this year, Musk said he expected utility-scale storage products to make up 80 percent of Tesla’s stationary battery business.

According to a letter to shareholders, Tesla reported that it generated $14 million from vehicle sales and $27 million from regulatory credits. The company produced a record 12,807 vehicles during the second quarter.

During the call, Musk said the company is considering factories in other countries to meet growing demand in foreign markets and is optimistic about having the production capacity to do so. “If you go back to 2010, we were producing 500 cars a year,” he said. “Now we make 500 cars in three days.”

Tesla is now gearing up to start deliveries of its new car, the Model X, in September.

“The Model X is a particularly challenging car to build, maybe the hardest car to build in the world, but it is an amazing vehicle, and I think it’s going to blow people away,” Musk said.