Tesla’s energy storage business is seeing strong demand, with CEO Elon Musk saying on the company’s earnings call that Tesla is almost sold out of its Megapack battery systems, alongside its Q3 2026 financial results.
In its Q3 2026 Update, Tesla says its energy storage business recorded its highest-ever order rate and backlog during the quarter, even as energy revenue declined.
Tesla has been preparing for this growth by expanding Megapack production. In August, we reported that Megapack 3 production had begun at its Texas Megafactory, which has a planned annual capacity of 50 GWh. The Q3 letter is the first quarterly report to include that milestone.
Tesla also points to data centres as a growth driver, saying energy storage is the fastest way to add power to the existing grid and is critical to data centre uptime. The company has recently supplied Megapacks for AI data centres in Taiwan.
According to the letter, energy storage deployments reached 13.7 GWh in Q3 2026, up about 10% from 12.5 GWh a year earlier and slightly above the 13.5 GWh deployed in Q2. That remains below the 14.2 GWh Tesla deployed in Q4 2025.
Tesla Energy Storage Deployments (GWh)
Source: Tesla Q3 2026 Update.
Despite higher deployments, energy generation and storage revenue fell 16% year-over-year to $2.88 billion (C$4.05 billion). Tesla attributed the decline partly to tariff-related customer refunds, and its CFO said on the call that tariff refund money is being used to expand U.S. manufacturing.
Another milestone came from Nevada, where Tesla shipped its first Megapacks built solely with its own lithium iron phosphate (LFP) cells. The Nevada LFP operation is listed at 7 GWh of annual capacity and is in early ramp.
Tesla now lists 110 GWh of combined annual Megapack capacity across California (40 GWh), Shanghai (20 GWh) and Texas (50 GWh), although the facilities are at different stages of ramping up.
With demand approaching available supply, according to Musk, Tesla’s next challenge will be increasing production quickly enough to serve a growing market for grid storage, from utility-scale projects in Europe to AI-related power infrastructure.
Related Articles:
- Tesla begins Megapack 3 production at new 50 GWh Texas Megafactory
- Tesla Megapack project in Taiwan supports AI data centres
- Tesla secures 3 GWh Megapack deal with Zhero in Italy
- Tesla Q3 2026 Earnings: Revenue Holds at $28 Billion as Profit Falls and Cybercab Robotaxi Rides Begin
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