Tesla’s Battery Fire Actually Shows It Is Much More Than an EV Company

2 months ago 18
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Updated July 30, 2021 2:37 p.m. ET / Original July 30, 2021 11:38 americium ET

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Tesla Powerpack batteries astatine Hornsdale Wind Farm successful Adelaide, Australia.

Mark Brake/Getty Images

Electric-vehicle pioneer Tesla appears to person suffered a setback successful different 1 of its businesses. A occurrence has been reported astatine 1 of Tesla’s stationary powerfulness projects successful Australia.

This setback, however, is besides a reminder that Tesla’s ambitions agelong good beyond cars.

A Tesla (ticker: TSLA) megapack—which is fundamentally a immense postulation of rechargeable batteries for utility-scale powerfulness storage—caught occurrence successful Australia astatine a projected called the Victorian Big Battery, Reuters reported. The artillery tin store 450 megawatt hours of energy—that’s similar 4,500 Tesla vehicles connected together.

A artillery installation of that size tin power, perhaps, 150,000 homes for a year. That estimate, of course, depends connected a fewer factors—such arsenic mean household consumption. But this isn’t astir backup powerfulness during an outage. Megapacks are bought by utilities and added connected to renewable powerfulness procreation assets—to store powerfulness for erstwhile the upwind isn’t blowing oregon prima isn’t shining.

Tesla and Neoen (NEOEN.France), the French inferior that manages the reserve, weren’t instantly disposable to remark astir the fire.

Tesla banal isn’t taking a hit. Stationary powerfulness quality doesn’t look to determination the banal each that much. Shares are up 1.3% to $685.89 successful day trading. The S&P 500 and the Dow Jones Industrial Average are some down 0.6%. Tesla banal is gathering connected gains from earlier successful the week, aft the institution reported better-than-expected second-quarter numbers Monday evening. Tesla shares person gained astir 7% for the week truthful far.

Stock successful Neoen roseate astir 0.6% successful overseas trading Friday.

Tesla and Neoen person different projects successful Australia, specified arsenic the Hornsdale Power Reserve. The reserve stores powerfulness from the Hornsdale Wind Farm. Adding artillery retention to renewable powerfulness generation—such arsenic upwind and solar—can marque renewable resources portion of baseload generating capacity.

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For now, Neoen calls Hornsdale the largest retention artillery reserve successful the world. The Victorian Big Battery is inactive nether construction. The archetypal signifier of the Hornsdale task is simply a 100-megawatt artillery pack. The 2nd signifier of the task is different 50-megawatt artillery pack.

Tesla CEO Elon Musk has repeatedly spoken astir the value and accidental for his institution successful the stationary powerfulness market, adjacent if Tesla vehicles inactive drawback the headlines. A 2015 Tesla shareholder missive called the full addressable marketplace for stationary retention products “enormous and overmuch easier to standard globally than conveyance sales.”

A the company’s battery exertion day successful September 2020, Musk said: “Less than 0.1% of [potential] stationary retention has been done…stationary retention has hardly begun, converting the planetary conveyance fleet to electrical has hardly begun.” Tesla has a batch of accidental for maturation successful stationary power.

And this past week, connected the company’s net league call, Musk added again that “we person a important unmet request in stationary storage.” One of the things holding the institution backmost connected this beforehand is artillery supply. For now, Tesla is prioritizing gathering cars alternatively of stationary artillery packs.

Still, the stationary retention concern is growing: Tesla deployed 1,274 megawatt hours of retention successful the 2nd 4th of 2021, up from 419 megawatt hours deployed successful the 2nd 4th of 2020.

Sales successful the Energy Generation and Storage division—how Tesla reports its stationary powerfulness business—amounted to $653 cardinal successful the 2nd quarter, up from $225 cardinal from a twelvemonth earlier. But, companywide, full Tesla income amounted to astir $12 cardinal successful the 2nd 4th of 2021.

Storage is simply a tiny portion of the wide pie—for now.

Write to Al Root astatine allen.root@dowjones.com

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