Forget Electric Cars, Tesla Thinks Its Energy Business Will Be Just as Big

Tesla's CEO said the energy business will equal if not surpass its electric vehicle unit.

Forget Electric Cars, Tesla Thinks Its Energy Business Will Be Just as Big
Solar panels on a home sl-f/iStock

Forget electric cars, Tesla's outspoken founder and Chief Executive Elon Musk predicts its energy business will eventually be equal or larger than its green vehicle business. 

Speaking during an earnings call to discuss third-quarter results in which Tesla surprised Wall Street by posting a profit, Musk said its energy business which includes solar panels, energy storage and other products and services related to it, could be bigger and will "certainly be of a similar magnitude." 

RELATED: TESLA'S Q3 RESULTS SOAR HIGH AND THE COMPANY RETURNS TO PROFITABILITY 

Energy storage now a focus for Tesla 

For its third quarter, Tesla said energy storage deployment hit an all-time high of 477 MWh and that the first deliveries of its Tesla Megapack, which is a 3 MWh battery pack, will begin in the fourth quarter. The company also recently launched solar configurators for small and medium-sized businesses that include standard and transparent pricing that boosted growth. In the third quarter, Tesla said it deployed 43 MW of solar, which is 48% higher than the second quarter. 

Still, as it stands most of Tesla's revenue comes from it's Model S, Model X and Model 3 electric vehicles. With $5.3 billion in revenue coming from the automotive segment in the third quarter, that leaves about $1 billion of its total $6.3 billion in revenue coming from other businesses including energy. Tesla doesn't break out the storage business.

For around 24 months Tesla had ignored its energy and solar efforts as it focused on the Model 3. But now it's all about storage. “We had to do it because if we didn’t solve the Model 3, Tesla wouldn’t survived," said Musk on the conference call. “So, unfortunately, that shorted other parts of the company.” Now he said Tesla has its attention on building that segment of its business. 

Solar tiles finally ready for prime time 

Later this week Musk said Tesla will roll out solar roof tiles, the third iteration. The solar roof tiles were first unveiled in 2016 with pre-orders opening in 2017. This announcement implies the tiles are now ready to make their consumer debut. 

"We will be releasing Version 3 of the Tesla Solar Roof. That's the integrated solar panels integrated with the roof. So that's -- I think this is a great product. Version 1 and 2 where we're still sort of figuring things out. Version 3, I think, is finally ready for the big time. And so we're scaling up production of the Version 3 solar tower roof at our buffalo Gigafactory. And I think this product is going to be incredible," Musk said.

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