Tesla to deploy nearly 4GWh of battery energy storage systems in 2021

Tesla will ramp up its energy storage business in 2022, executives including CEO Elon Musk said, after the company reported that battery storage systems deployments will grow 32% year over year.

The company has released its latest quarterly financial results, which include annual results from its automotive and energy segment businesses.

According to industry media reports, Tesla Inc. produced and delivered nearly 1 million electric vehicles in 2021, setting a new record for the installed capacity of solar power facilities deployed in 2021.

Arevon Asset Management deployed the 100MW/400MWh Saticoy energy storage project using Tesla's Megapack battery energy storage system, which was officially put into use last year.

Tesla deployed 978MWh of battery storage systems in the fourth quarter of 2021, down slightly from 1,295MWh in the third quarter, and a steeper decline compared to the fourth quarter of 2020, when the company was operating in residential, 1,584MWh of Powerwalls battery storage systems and Megapacks battery storage systems were deployed in the industrial and utility-scale sectors.

However, annual report data shows that Tesla has deployed 3,992MWh of energy storage systems in 2021, compared to 3,022MWh in 2020. With a year-on-year increase of 32%, energy storage systems deployed in 2021 are more than double the 1,651MWh in 2019 and a significant jump from 358MWh in 2017.

Demand for energy storage is significantly higher than capacity, company executives said.

All aspects of Tesla's business have been curtailed as supply chain issues have affected industries across the globe. Elon Musk, CFO Zach Kirkhorn and senior vice president Drew Baglino said chip shortages and the coronavirus pandemic were the main factors behind the deployment delays.

In terms of stationary energy storage systems, Musk said Tesla's Powerwall and Megapack may use lithium iron phosphate batteries instead of nickel because iron is abundant. Musk said manganese and its future availability remain a question mark. The electric vehicle (EV) business is given priority for material supply in 2021.

Musk said that in the long run, the company's energy business could be terawatt-hours a year, in other words, the scale of deployment is very large."

“Our plans for the production of the Megapack system and overall energy storage deployment this year are very ambitious,” Kirkhorn said. He also added that the business unit needs to grow rapidly, even faster than the automotive business.

Musk reiterated that Tesla's primary mission is to accelerate sustainable energy development. "It's always been our number one priority and we're working hard to make it happen," he said.

The company had already broken ground last year on a 40GWh Megapack battery storage system production plant in California to add to its line of battery storage systems at its Gigafactory 1 production facility in Nevada.

The 300MW/450MWh Victorian Big Battery battery energy storage project that was launched in Australia last December and Arevon Asset Management Co., Ltd. opened in California. The 100MW/400MWh Saticoy battery storage project in operation, a 99MW/198MWh battery storage project in the UK by Harmony Energy and Fotowatio Renewable Ventures, and the Arizona utility Salt River Project, which came online last September. 25MW/100MWh battery energy storage system. The company won its first Megapack order for a 6MWh battery energy storage system in Japan last August.