It can be expected that Tesla's energy storage product sales will continue to grow, if all the use of LFP batteries will generate strong demand for them, will greatly promote the installed capacity of LFP batteries in the energy storage market.
In addition to the rising sales of new energy vehicles, the performance of Tesla's energy storage business in 2021 can also be remarkable.
On February 7, Tesla disclosed its 2021 financial report, with annual revenue of $53.823 billion, an increase of 71% year-on-year. Among them, in the energy storage business segment, Tesla deployed 3.99 GWh of energy storage products in 2021, an increase of 32% year-on-year, mainly due to the growth of Megapack battery energy storage system sales.
Tesla 2016Q3 to 2021Q3 energy storage installed
Image source: Network
Tesla currently has three energy storage products: Powerwall, Powerpack and Megapack, which are built-in 7 to 13.5kWh, 100kWh and 3MWh.
Tesla said that due to the continuous growth of Powerwall market demand and the priority supply of lithium battery production capacity to electric vehicles, resulting in a serious backlog of orders for its energy storage products, insufficient lithium battery production capacity is the biggest factor limiting the growth of its energy storage product shipments.
In November 2021, Tesla announced that its Powerwall energy storage system has been installed more than 250,000 units worldwide, and it is expected that its Powerwall sales will continue to grow at a rate of about 100,000 units per year in the future, and is currently trying to increase production capacity.
On the 2021 Q2 earnings call, Tesla CEO Elon Musk also revealed that the production capacity of its Megapack energy storage products by the end of 2022 has been sold out.
In order to meet the growing demand of the energy storage market, Tesla also announced in the third quarter of last year that it will build a 40GWh annual energy storage product factory in California, mainly to produce its grid-level battery energy storage system Megapack.
Expanding from the existing 3GWh capacity to 40GWh, more than 10 times the expansion of energy storage capacity, shows that Tesla is very much looking forward to the broad market potential of Megapacks products.
In fact, since 2020, Tesla has won a number of Megapack energy storage orders around the world. Among them, the order growth in 2021 is particularly obvious.
It is worth noting that in July 2021, the 300MW/450MWh Victoria Energy Storage Power Station in Australia had a fire accident during the test, and a total of 210 Megapacks were used in the energy storage project.
Tesla's current energy storage products mainly use ternary batteries, and the batteries come from Japanese and Korean companies such as LG New Energy, Panasonic and Samsung SDI.
In this case, in order to further improve the safety of energy storage products and reduce the pressure caused by the shortage of cobalt lithium and nickel raw materials and the rise in prices, Tesla plans to switch the lithium batteries used in its energy storage products from ternary to LFP.
Tesla CEO Elon Musk said in a Q&A session related to the financial report for the fourth quarter of 2021: "It is expected that all fixed energy storage (ESS) products will switch to lithium iron phosphate (LFP) batteries."
Musk said that in addition to LFP batteries, there is also an option for a manganese-based version.
It can be expected that Tesla's energy storage product sales will continue to grow, if all the use of LFP batteries will produce strong demand for it, will greatly pull the installed capacity of LFP batteries in the energy storage market, so as to provide good development opportunities for batteries with competitive advantages in the field of LFP batteries.
In August 2021, Tesla partnered with Japanese power company Global Engineering and engineering firm Ene-Vision to build a 6095kWh battery energy storage project in Hokkaido. Tesla provided its Megapack for the project, using the LFP batteries of the Ningde era.
At present, CATL is the largest supplier of Tesla LFP batteries, which lays the foundation for its large-scale supply of LFP energy storage batteries to Tesla in the later stage.
In addition, Chinese battery companies, including BYD, Hefei Guoxuan, and Ewell Lithium Energy, also have the opportunity to cooperate with Tesla in the supply of LFP energy storage batteries.
It is worth noting that Tesla's large-scale introduction of LFP batteries in electric vehicles and energy storage products has also had a certain impact on the product development strategies of some international battery companies.
Foreign media reported that Korean battery companies LG New Energy and SK on have begun to develop LFP batteries in order to meet the diversified product needs of customers.
In this case, LG New Energy and SK on may also use LFP batteries in their energy storage products, driving the further growth of LFP batteries in the energy storage market.