I agree mostly with your take on Tesla Solar, but...I keep seeing this meme that Tesla Energy is going to save the day, the year, the decade. Not just from you but all over the place. Especially here on TMC. However much I might wish that to be the case (and as a shareholder I would like it to be so) the actual facts do not support the hopium on offer.
So sorry if this seems like a snippy response to your post, really it is a response to all energy hopium posters.
1. Tesla solar is pants. It is not even a rounding error on global solar sales. It shows no signs of changing nor do I expect it to in this decade, if ever. Approx 315 GW of global solar was installed in 2022, and Tesla will have done barely 0.3 GW of that. Can you say 0.1% very slowly ?
2. Tesla wind is worse. It is to be precise zero. So of the 110-120 GW of wind installed globally in 2022 there is nil attributable to Tesla. Yes, that is 0%. Nada, zilch, rien.
3. The evidence I see suggests that Tesla Energy is slipping in the storage space. In domestic storage it is not even on the leader board for most of the world, excepting USA. In utility storage it has no penetration in China, is market leader in USA, and RoW is very murky but with plenty of non-Tesla wins.
4. For the next several years the vast bulk of the cells going into the storage market will be LFP. That is good, the characteristics of LFP make it a good match for storage. Remind me again how much LFP Tesla makes. Yes, zero. Tesla does not have a competitive advantage in LFP manufacture. The people who do make LFP such as BYD, CATL sell to everyone in the storage market, including themselves for packaging into client-ready cabinets. So the people who are most vertically integrated in this area are BYD et al, not Tesla.
5. Putting LFP into a 4680 form-factor does not seem to be an attractive or high-priority thing for the next few years, if ever. Prismatic LFP is plenty good enough for storage. Load-bearing prismatic LFP seems to be attractive in auto as well, but that's not that relevant in storage (except double-wrapping becomes unnecessary). So by the time that 4680 form-factor reaches LFP (if ever) then there is no reason to think that Tesla will have any particular magic sauce to add.
6. The biggest other cost in storage is the bi-directional power electronics, i.e. the inverter-charger. The vast majority of these in the world are made in China. The Tesla inverters are good, but they are not a game-changer. Again, the vertical integration is better in China than in Tesla, or anybody else in USA or Europe/etc for that matter.
7. The actual products coming out of China increasingly look generic, whether they are at domestic scale or utility scale. This is because there is increasing convergence on a dominant design for each segment's core-product. (The intermediate scale, aka Powerpack, for the commercial segment, looks to be an evolutionary dead end). Now I don't think we are quite at a fully generic dominant design quite yet, but we are getting close. Especially in the domestic market where I increasingly need to check the logo before I can figure out who is actually making/selling product coming out of China. This means that huge numbers of companies who you've never heard of are suddenly making LFP domestic plug'n'play product that is remarkably good quality, fully specced, absolutely functional, low priced, and is really a good deal with not much 'pray' required. That is also increasingly the case in the utility market as well. Take a look at this link and you'll see one (of many) wins of yet another fairly unknown utility-scale supplier of containerised storage by the half-GW, with not a Tesla logo in sight.
China connects 220 MW/440 MWh battery to grid
Robestec has connected a 220 MW/440 MW battery storage system to the grid in Ningxia, China. It is reportedly China’s largest standalone energy storage station, and uses lithium iron phosphate (LFP) batteries from Hithium Energy Storage.www.pv-magazine.com
8. There is no logistics or cost advantage to Tesla in making this stuff in the USA, whatever the belief system one ascribes to. Roughly speaking one container-load of stuff disappears into one door of a factory and one container of product comes out the other door of the factory. Pretty much that is how it is both by weight and by volume. Irrespective of whether it is a domestic-scale product or a utility-scale product. The two big lumps that go in are the LFP and power electronics; labour and dumb steel get added; software gets loaded; testing happens; and a finished product comes out ready for mass-shipment. The tightest logistics integration comes from doing all this in China. Any claims that somehow doing all this in the USA lead to a better manufacturing/logistics supply chain are plain baloney. That is precisely why storage competitors of Tesla are out there around the world offering more product now than Tesla, even when Tesla's ramp is constrained by chip and cell supply shortages. Believe me, I have some on order from a competitor - the Tesla product is not available, not certified, does not integrate well with the rest of my system(s), and is in any case twice the price for no corresponding gain in functionality.
9. And last time I checked Chinese workforce were a darn sight cheaper than a US workforce, highly motivated, and very productive. In fact there is a Tesla plant or two in Shanghai that prove this (auto, and supercharger) and Shanghai is probably the most expensive place to make stuff in China. The only advantage the USA (and by extension, Tesla-USA) has is a cost one driven by a taxpayer subsidy called the US-IRA and various tariff and non-tariff barriers (whatever happened to free trade ?). That does not seem like a sustainable competitive advantage to me.
10. I've yet to see any evidence of a Tesla software advantage in this sector vs peer competitors. Yes there are advantages vs non-peer competitors, but not vs peer competitors. Want a utility-scale VPP or a trading/operating/metering platform, buy Kraken. Want to integrate with your car and your solar, buy Zappi. Or many other products. The (domestic-level) problem in the software area is not a lack of offerings, or the lack of standards, it is a lack (until now) of a dominant design that allowed this problem-set to be cleaved, and the desire by vendors for lock-in in the scaling wars. My personal guess is that the emergence of dominant designs will soon create the conditions that allow this to be solved. Yes Tesla is a nice little Apple-style walled garden, but don't mistake it for the only game in town. And whilst sometimes walled gardens are very productive Apple-style enterprises, more often they are a fast road to ruin - Yahoo, AOL, DoCoMo, are just some that tried and failed.
11. Look at the actual numbers.
a) If you think that Tesla Energy is going to grow to become 50% of Tesla Incs revenue then either the rest of Inc is going to have an epic fail, or I have to ask how many decades are you looking ahead - best I can figure out is 40% by 2030 with a lot of favourable winds to reach Tesla's own target:
View attachment 891832
b) Ditto profits, well only 37%,
View attachment 891833
c) Ditto cell usage, max 50/50 by 2030:
View attachment 891834
12) So overall if Tesla Energy is going to have a crack at world domination in storage it will need to scale much faster than it has been doing; to recognise that the competition is in fact here; and to spread its plants globally like now, and especially into China and Europe. If it is not careful it will enter the death spiral of Tesla solar and be globally irrelevant.
13) No more hopium please.
Tesla wind? Seriously?
It is quite obious that the hopium is mostly megapacks and batteries. And yes, if you compare most of energy aspects with China, nobody fares well.
