Tesla Sees AI Data Centers Driving Energy Storage Growth

Tesla said during its earnings call Wednesday that demand from artificial intelligence data centers is becoming a key growth driver for its energy storage business, as the company reported its second-largest quarter for battery deployments.

Tesla deployed 13.5 GWh of energy storage during the second quarter, up 53% from the prior quarter and 41% from a year earlier. Chief Financial Officer Vaibhav Taneja said the company’s energy storage order backlog remains robust and that Tesla is expanding manufacturing capacity in Shanghai and Texas to meet demand tied to data centers and broader grid electrification.

Chief Executive Elon Musk said batteries are becoming increasingly important for traditional grid applications, such as balancing renewable generation, as well as for managing rapid fluctuations in electricity demand at AI data centers. He said battery systems can help large electricity users reduce peak demand and improve power quality, making it easier for utilities to serve additional load. Musk noted that SpaceX has purchased large numbers of Tesla Megapacks for its data centers.

Musk said Tesla is also developing “Megapod,” an AI computing system that could potentially be deployed at Supercharger sites to tap into the network’s roughly 7 GW of connected power. The EV charging network expanded by more than 2,400 stalls during the quarter, reaching 8,704 stations and more than 82,000 connectors globally.

Tesla said battery supply remains a key constraint as it expands both vehicle production and energy storage capacity. The company expects capital spending to exceed $25 billion this year as it invests in battery manufacturing, AI infrastructure and other industrial capacity.

–Reporting by Allegra Fradkin, afradkin@opisnet.com; Editing by Michael Kelly, mkelly@opisnet.com