Published on April 26th, 2019 |
by Kyle Field
April 26th, 2019 by Kyle Field
Tesla Pushing Up its Solar + Storage Business In 2019
Elon Musk committed to ramping up Tesla's Energy companies are expanding on the energy storage and the solar side of the equation on the company's first quarter 2019 investor call earlier this week.
The vision all along for Tesla was that it would build up a robust lineup of electric vehicles supported by energy storage and solar generation products that can supply and store renewable electricity. Tesla's solar business has continued to sell in the residential market and the company has struggled in recent years to produce enough battery cell capacity. Its residential solar business has lost significant share from its days as SolarCity, during which the company enjoyed a 33.5% share of the residential solar market, compared to 9.1% today.
The drop in solar deployments continues even today, as Tesla noted that Q1 2019 energy storage and generation revenue decreased by 13% compared to Q4 2018, driven by a sharp decrease in solar deployments.
Tesla Energy Storage
On the Q1 2019 earnings call this week, Musk shed some light on the reasons behind the lack of availability of Tesla's energy storage products and their plans to ramp up the entire line of Tesla Energy products in 2019. To date, Tesla has had to pull out all the stops in battery cell production just to keep the automotive business on track, Musk said. Tesla had with the Model 3 production ramp, which happened in parallel to several expansions at Gigafactory 1.
Musk shared that they planned to dedicate 5 –10% of Tesla's battery cell production to energy storage products, and it is much easier to build Powerwalls and Powerpacks because there are fewer cells in them compared to Tesla's vehicles. Elon said that he expects "something on the order of 300%" growth in Tesla's energy storage product business this year as a result of the increased focus.
Tesla started routing Gigafactory 1 cell production back to its energy storage products in Q1 2019 , which translated to a 30% increase in production of Tesla's energy storage products in Q1 2019 versus Q4 2018.
Solar Roof Tiles
Tesla's Solar Roof Tiles also spent some time in the spotlight on the earning call, as Musk talked about a new “version 3” of the roof tile product and said that the company is looking to scale production up significantly.
The future of Tesla's energy storage could be found not in lithium-ion batteries, but in supercapacitor-powered batteries, thanks to the proposed deal between Tesla and Maxwell Technologies. Tesla made a proposal for all shareholders of Maxwell Technologies to purchase all outstanding shares of the stock, and it has extended the timeline of the offer several times. Tesla making a purchase offer to Maxwell Technologies is a potential sign that Tesla has plans to move beyond lithium-ion batteries and their current 300,000 to 500 , 100 mile life expectancy, to a new energy storage architecture that would enable the 1,000,000 mile pack life that Elon Musk mentioned at the Tesla Autonomy Investor Day event earlier this week.
Maxwell's investor deck highlighted the fact that its dry electrodes have the potential to increase the life of batteries “up to 2x,” which is conveniently in line with Tesla's next-generation battery pack target. Building battery packs and vehicles that last longer is a foundational component of Tesla's strategy to build all of its vehicles to be capable of serving double duty as robot axes.
Maxwell's dry battery electrodes hold the potential to increase energy density of Tesla's energy storage products more than 50%. This would allow Tesla to increase the range without increasing the storage capacity of its packs by slashing the weight of future packs
An alternative theory on the potential Maxwell acquisition is that Tesla is not interested in chemistry improvement, but simply Maxwell production process improvements. The idea is that the real benefit to Tesla is in cutting production costs through a more efficient production process.
In response to a question about the integration of Maxwell's tech into Tesla's products, Elon seemed to add another item to his mental to do list. "We probably have an investor day later this year or early next to the cell and battery technology and future strategy and that will be very informative," he said. “We do recognize the criticality of this.”