While Tesla's automotive business struggles through its worst year in recent memory, the company's energy storage division is quietly becoming its most profitable lifeline. The battery maker just posted a 48% jump in energy storage deployments, with products like the Megapack and Powerwall now driving nearly a quarter of Tesla's gross profit - and earning margins that are double what the company makes selling cars. It's a dramatic shift that's reshaping what Tesla actually is as a business.
Tesla's energy storage business just did something the company desperately needed - it saved a dismal earnings report from turning catastrophic. While the automaker's profit tumbled 45% compared with 2024, driven by collapsing electric vehicle sales, the battery storage division quietly delivered the kind of growth that used to define Tesla's automotive heyday.
The numbers tell a story of business transformation. Tesla deployed a record 46.7 gigawatt-hours of energy storage products in 2025, a 48% surge from the previous year, according to the company's official 10-K filing. That's not just incremental growth - it's the kind of hockey-stick trajectory that makes investors forget about declining car sales, at least temporarily.
But here's where it gets really interesting. Big stationary batteries like the Megapack and residential Powerwall units, along with solar installations, now drive nearly a quarter of Tesla's entire gross profit. Last quarter alone, the Megapack contributed $1.1 billion to the storage business's $3.8 billion in gross profit for the full year. Storage and energy generation revenues climbed 26.5% to $12.8 billion - a figure that's starting to look material even for a company of Tesla's size.
The margin story is even more compelling. These batteries and solar panels deliver a gross margin of 29.8%, nearly double what Tesla earns from its core automotive business. It's a stark reminder that sometimes the side project becomes more profitable than the main act. While Tesla's been busy slashing car prices to defend market share, its energy products have been quietly commanding premium economics.
