The electric vehicle and storage maker provided insights into its Megapack energy storage business and the Megapack XL, the stationary battery storage product that Tesla says has the highest energy density on the market.
At the recent Tesla Investor Day at its Gigafactory in Austin, Texas, the electric vehicle (EV) and battery storage maker revealed some interesting details about its Megapack energy storage business. Tesla’s energy business was one of the many parts of this three and a half hour investor day on March 1st. Referred towards the end of the conference, it offered some new insights into the rapidly expanding Megapack business.
Mike Snyder, Senior Director, Megapack at Tesla provided the overview. Snyder has been with Tesla for nine years, a little short of the ten-year track record of Tesla’s big energy storage business. As on the auto side of the business, the first decade has been grueling as Tesla ramped up its megapack manufacturing facilities in the U.S. to meet rising demand for its utility-scale stationary storage product. The Megapack factory in Lathrop, California, is appropriately dubbed the “Megafactory,” though it’s the smaller cousin of the four gigafactories Tesla operates in Austin, Fremont, Berlin, and Shanghai, which collectively produce 40,000 electric vehicles per week.
According to Snyder, over 16 GWh of megapacks have been installed worldwide to date, with the goal of increasing that number to 100 GWh as early as this year. He sees 100 GWh as the annual running rate for the next few years, which is a large increase after only 16 GWh in the first ten years. The latest product is the sixth generation Megapack XL, which packs 3 MWh per unit of lithium-ion battery. Snyder calls the Megapack XL the highest energy density stationary battery storage product on the market, capable of packing up to 300 MWh on a single hectare of land. According to Snyder, that’s twice the power density of a typical Gaspeaker system.
Snyder was joined onstage by Drew Baglino, Tesla’s senior vice president, powertrain and energy engineering. Both Baglino and Snyder highlighted Tesla’s mastery of power electronics, with the company “shipping more power electronics annually than the solar and wind industries combined.” The cumulative power so far has been 1.4 TW of Tesla’s vehicle and stationary storage products. Coupled with Tesla’s extensive in-house software development capabilities, the megapack can function in “virtual machine mode” and add synthetic inertia to the power grid. According to Baglino, it’s no longer just about feeding clean energy into the grid, but “adding power stability” to the mix. As megapack costs continue to fall, these utility-scale energy storage units will replace conventional fossil-fuel power plants to provide both energy and resiliency for power grids.
As on the car side, Tesla’s ambitions on the megapack side are impressive: The long-term goal is to increase annual production to 1 TWh, which would be 25 times the annual production capacity of the current Lathrop factory. Lathrop himself was quite an achievement, as Tesla converted an existing JC Penney distribution center into a state-of-the-art manufacturing facility for its megapacks in less than 12 months. The Lathrop Megafactory was completed in September last year.
Speed is also of the essence when it comes to creating megapack projects. Snyder emphasizes the plug-and-play nature of the Megapack and that Megapacks can be easily chained together to form massive and intelligent power blocks that can be easily connected to power grids around the world. In the past four years alone, Tesla has quadrupled the installation speed of megapack projects while reducing the labor required by a factor of three.
Tesla’s Investor Day also covered developments in the distributed storage space, where Tesla’s Powerwall is the flagship product. Whether it’s the Megapack and front-of-the-meter storage, or the Powerwall and behind-the-meter storage, we can expect all of Tesla’s stationary energy storage products to complement what the automaker is doing in the EV front does. Both are key elements in Tesla’s vision for a “sustainable energy earth,” to use Elon Musk’s phrase at this investor day. While the 2030 target on the EV front is to produce 20 million vehicles annually, the 2030 target on the energy storage front is to hit the 1 TWh mark. According to Tesla, that will require an investment of $150 billion to $175 billion, which is actually less than a third of Tesla’s current market cap. On the other hand, it’s about five times Tesla’s previous investments ($28 billion).
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