Tesla Energy Has 100,000 Orders For Battery Energy Storage System

2 years ago by Mark Kane 61

The Tesla Model S And The Powerwall

The Tesla Model S And The Powerwall

Tesla Energy PowerPacks

Tesla Energy Powerpacks

Tesla Motors CEO Elon Musk and CTO JB Straubel announced that the number of reservation for Tesla Energy products stands at around 100,000, worth some $1 billion.

Tesla Energy products include small Powerwalls (7 or 10 kWh modules) and larger Powerpacks (100 kWh modules).

Initially, 80% of the reservations were for Powerpacks, but surprisingly higher demand for home Powerwalls has changed the proportion to 70%/30%. We believe that the split between Powerpacks and Powerwalls is counted on a kWh basis, not on the number of reservations.

The single largest reservation for Powerpacks is 250 units (25 MWh).

Small production has already begun in Fremont, CA, but Tesla Energy’s main production site will be at the Gigafactory in Nevada. By the end of this year, the company intends to install a production line and begin production in Q1 2016.

It seems that Tesla Energy is sold out through the end of 2016. In the fourth quarter, Tesla expects $40-45 million of revenues at gross margins of maybe 15%. Next year, quarterly revenues could be 10-times higher, reaching a few billion annually in 201 .

Source: Fortune

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61 responses to "Tesla Energy Has 100,000 Orders For Battery Energy Storage System"

  1. Speculawyer says:

    I think that number is pretty bogus. These are just people clicking on a web site and expressing interest . . . they are not orders.

    I am one of them. Will I buy a Powerwall? Maybe. If I can figure out a good way to integrate it into my solar PV system and it doesn’t cost too much. But I kinda doubt I’ll buy one because it does pretty much nothing for me.

    But they probably do have a fair amount of real interested people (not 100,000). And thus they’ve proven that there is demand out there that validates their building the super huge Gigafactory. And THAT is the real goal of this PR campaign. I think that car batteries will remain the main use of their batteries.

    1. Anthony says:

      The market for the powerwalls isn’t anyone who has PV now, its for those who are going to be getting PV installed in the next few years. In my state (NV), the electric utility is about to end Net Metering at the end of this month. This means that instead of selling pack energy at the retail rate (12c), they’re going to be selling back excess energy at the wholesale rate (4.5c). Beyond that, they’ll get hit with demand charges and such. Those folks will see a benefit from having an ESS attached to their solar power system because it will save them 7.5c for every kWh they can store and use later rather than send back to the grid at the wholesale rate and buy back later. For that to pay back over the first 10 years, it would need to cycle about 4,500 kWh per year.

      1. ModernMarvelFan says:

        “For that to pay back over the first 10 years, it would need to cycle about 4,500 kWh per year.”

        4500kWh/365 = 12.1kWh + 15% loss ~= 20kWh.

        So, you would need almost 3 (7kWh) version of the powerwall.

        Does it still pay back in 10 years? Inverters included?

        1. None says:

          Yikes! That is like driving a Model S for 150,000 miles with the power cycling to do this over 10 years. Assuming you only had a 10 kWh battery (instead of a 60 kWh battery), that would be the equivalent wear and tear of driving an S60 for 900,000 miles.
          I’m not so sure the battery will really last THAT long.

          Seems to me that businesses have the greatest potential here – – using batteries to offset peak load demand charges when spikes occur.

      2. sven says:

        Anthony,

        I recently read about Nevada ending net metering for new residential customers. What about industrial customers, namely Telsa’s Gigafactory? Where industrial users with PV systems allowed to use net metering in the past, and if yes, will net metering still be allowed for industrial customers who install PV arrays in the future, ie Tesla?

    2. Big Solar says:

      I imagine some of the orders are just people getting in line.

    3. Mathew Smith says:

      Keep in mind that Solar City is a subsidiary of Tesla, and has been making thousands of residential (and commercial) rooftop PV installs. The option to add 7 or 10.5 kWh storage units priced at $3,000 and $3,500 each, respectively, is an easy one to make in my opinion. So Tesla will have sales for these units through Solar City, while simultaneously building the necessary infrastructure to power their electric vehicles. If nothing else, Tesla is setting a bold example for the potential of sustainable technology, and working towards a dream similar to mine: “Power everything on electricity, then convert existing generation to ‘clean sources’ for a renewable world.”

  2. PVH says:

    I do not understand the point in those type of announcements. It must be something of a cultural misunderstanding. I mean what in my culture is felt as pointless bragging is seen as good management in another. In the world I know, successful companies 1/ sell those 100,000 units 2/ make a profit doing so. Then eventually if the press discloses such successes you get a “we certainly tried our best and are glad it succeeded” from the management, if you are lucky . I guess many must look at this wondering what they are up to.

    1. Anon says:

      In the business world, which follows rules that are often quite different than the personal rules people tend to obey in their respective cultures– it is VITAL that investors and customers (current & future) have an awareness about the growth potential and relative health of a given company. Greed / Capitalism, makes people do strange things. One of them– is brag about their products, available or otherwise. Even whores in ancient Greece 2500+ years ago, did this. Nothing new here.

      1. Bonaire says:

        Did you know that Solyndra bragged of $2 Billion in backlog orders months before they shut down?

        1. Anon says:

          Do you know that that company, its people and its history– have NOTHING to do with Tesla?

          Talk about bogus logic…

        2. Steven says:

          Did you know, everyone who died of cancer, drank water at some point in their lives?

          Talk about false logic.

      2. PVH says:

        Understood but one thing is to brag about the products or services you offer, as you wrote this is done since 1000’s of years by all companies (& Greek whores). I mean this company is often compared to Apple but while Ste iphone was a much better product I never heard him saying at any point in time “we will sell XXXXX of them in the next two years”. CEO’s of large corporation do not talk like this,I find Tesla PR very odd.

        1. Pushmi-Pullyu says:

          Much as I dislike hype, it must be an effective marketing tool, or there wouldn’t be so many companies using it for promotion.

          Just which country or culture are you claiming is free from using hype to promote business? A few years ago, German battery maker DMB hyped its Kolibri battery tech, claiming it was a breakthru and that they could make battery cells for EVs at half the prevailing per-kWh market price. But when they finally got around to selling a production Kolibri battery, the initial offering was strictly for stationary storage, no EV battery pack offered. And the price didn’t exactly have customers beating a path to their door, either. (Since then they have started offering a “traction battery”, which might be used in an EV conversion vehicle, but so far as I know, they’re not selling those in large numbers, nor supplying any EV manufacturer.)

          I was fooled into thinking DBM had the real deal, since they were an established battery maker selling to the forklift market. Since then, I’m a lot more cynical about claims from battery makers, even established ones.

          1. PVH says:

            I would define myself as west/northern European having lived abroad more years than in my country of origin, but again the example you provide is a company hyping its products (or services), which is of course very common.

          2. ModernMarvelFan says:

            The difference seems to be that when other company “hypes their products” and then fell short in sales, they get punished by the Wall Street in terms of stock price. But when Tesla “hypes” something, Wall Street just drinks the coolaids and let it go. Then when Tesla doesn’t meet the projection, it will just spin it into something else and Wall Street will reward it again. (Do we remember China?)

            1. Pushmi-Pullyu says:

              You have about half a point there, but you appear to be very misinformed. It’s not “Wall Street” that is keeping Tesla’s stock inflated far beyond any reasonable price level, it’s people who are excited about Tesla and support it by buying stock. Other than Morgan Stanley, investment advisers are pretty uniform in warning potential investors that Tesla’s stock price is inflated far beyond the actual value of the company.

              And I fail to see why Tesla should be punished for failing to sell as many cars in China as they anticipated. The important thing is that Tesla has managed to continue to grow its sales at fast pace, very nearly the pace it has been trying for, despite a severe problem with sales in China. The company managed to offset loss of sales in China with increased sales in the USA. So why do you think they should be punished for that?

              Where I grew up, companies which succeed in making very popular products, and also succeed in phenomenal growth in sales year after year, far greater growth than any other company in the same market, products which actually do make a better world, deserve lots of kudos and lots of investor money.

              If it was different where you grew up, then I feel sorry for you.

              1. ffbj says:

                As far as the stock goes evidence for this is that the latest offering from Tesla was oversubscribed raising $783 million, after initially only planning on raising $500 million. Is it insane, ludicrous? Perhaps.

      3. sven says:

        Anon,

        You’re comparing Elon Musk to an old-time Greek whore? Really? You’ve sunk to a new low. Turn in your Tesla fanboy pom poms at the door. ๐Ÿ˜‰

        1. Anon says:

          Yes. I firmly believe he understands that part of his job (beside the money, aesthetics and engineering aspects) is to whore and preach of every innovation, idea and product (current and near term), to not only investors– but all The People of Earth.

          This man fully intends to change the entire world as we know it, for the benefit of our species. He wants to tell you how he’s going to do it, and how you can help him.

          This is why any imprecise or “wrongful” reinterpretations of his motives or actions, will be corrected directly, and almost immediately. We see this time and time again in the media.

          Elon’s personal goals of a sustainable human renaissance thru disruptive technology, are not trivial things. But judging by his global impact on a number of long established industries to date: he’s actually making surprising forward progress.

          This is why I think he’s probably one of the best whores in human history.

  3. Billions and Billions of 18650 cells!!

    1. Anon says:

      I can see why Tesla was a little concerned / confused that Panasonic didn’t initially seem all that excited about the Gigafactory.

    2. Josh says:

      I don’t think they will be 18650. Aren’t the GF cells going to be ~10% taller and wider?

      I thought someone speculated 20700, or so.

      1. Pushmi-Pullyu says:

        20% taller and wider than 18650 cells, is what has been reported. As I understand it, the label “18650” indicates 18 mm wide and 65 mm tall. I dunno what the final “0” indicates, if anything.

    3. Ocean Railroader says:

      I really think Tesla could produce a trillion cells at least in the next ten or twenty years.

    4. Steven says:

      Several Segans of cells.

  4. Alaa says:

    Can someone tell me what will the demand be like when even a fraction of the Wh claimed here, are sold?

  5. sven says:

    “The single largest reservation for Powerwalls is 250 units (25 MWh).”

    Isn’t 250 Powerwalls at 10 kWh equal to 2.5 MWh (250 x 10 kWh = 2500 kWh = 2MWh)?

    1. Mark Kane says:

      Corrected.

    2. Fred Lambert says:

      It’s an error on InsideEV’s rewrite. Fortune article says they are Powerpacks, not Powerwalls. So 250 x 100 = 25 MWh

      1. sven says:

        Fred, the site redesign looks great! Very good content also. ๐Ÿ™‚

        1. None says:

          Fred-

          Glad to see you don’t have any advertisements that “lock” my computer to the top of the page. That was too frustrating! I always closed the site and figured I would return later.
          Other than that small issue from the past, LOVE the site!

        2. Fred Lambert says:

          Thanks. still some work on the redesign, but it’s coming along great.

          As for content, I’m going full-time next month so there will be much more content soon. Cool stuff coming.

    3. Bonaire says:

      The biggest letter of intent of orders is with AMS (Advanced MicroGrid Systems) for the various installs in California, from what I can tell. 50 MWh is their goal. But those are scheduled out for years.

      For units – I think the 100,000 total and $1 Billion is a bit suspect. Very “round numbery”. JB Straubel stated that 2016 power storage sales (packs and walls) was targeted at 1 GWh. However, that is between 250 million and 400 million and depends on how many they can put together and ship to installations during the year.

      I put in my name a few times on the Teslapowersystems web site and also tried a couple other names and there was no IP address duplication checks, duplicate names checking or anything. I have to believe they need to weed out the junk from their database for the Powerwalls and start to take funded deposits before we can be sure that there is any large number of PowerWall “orders”. PowerPacks are commercial/governmental/industrial and should be handled through direct sale and take binding contractual documents to verify a true order. And as such – aren’t they selling to distributors? That means end-users are not ordering but rather distributors are. And we have heard very little from the distributor landscape on how many systems they intend to install, where and when.

      I’m skeptical of these announcements of orders without any real data to verify. And with stories like this appearing in Forbes – it appears mainly to be done as a way to cause stock market activity by constantly talking about this market.

      1. See Through says:

        Are you kidding me? The “junk orders” is what Elon boasts about to sell more shares at hyped up prices. It won’t be surprising to find out that Tesla employees or contractors were doing exactly the thing you were doing to increase these fake orders. Not much will be delivered till 2016 anyway (JB Straubel says so). So no one will know the truth for years.

        1. Pushmi-Pullyu says:

          It’s really amazing how Tesla bashing trolls are such compulsive liars. Even when sticking to the truth would serve them better, they can’t help but make groundless, despicable insinuations.

        2. Steven says:

          So, it’s not just the cars, you hat everything Tesla.

          Let me ask, did Elon bully you in school, or did he run over your puppy?

          1. Nick says:

            Haha! Sounds like the makings of a country western song.

            “Gone run off with my wife, and wreaked my truck!

            Lost all my money when I sorted his stock!”

          2. See Through says:

            I don’t hate Tesla. I just hate fraudsters.

            1. Pushmi-Pullyu says:

              Clearly you have no objection to hypocrisy.

  6. Anderlan says:

    Their offering price is so low and their form factor so manageable that freakin Southern Company/Alabama Power of all people are buying units.

  7. ModernMarvelFan says:

    So, the things I don’t understand is that why are those orders there before GF opens?

    Does Tesla have spare battery capacity at this point? If so, then Model S and Model X certainly won’t be battery constrained and can sell more if Tesla choose to. That would lead me to believe that Tesla actually has spare capacity on batteries. That could be a good/bad news thing depending on how you look at it.

    Also, I just don’t see how the Powerwall would makes sense in the US for any homeowners at all. It just doesn’t pay back the same way that solar panels do (even without netmetering).

    Not to mention that inverters aren’t compatible which will additional cost to the system.

    Unlike solar panels, those battery will wear out much faster than the solar panels especially if you count on them cycling fully everyday.

    1. Pushmi-Pullyu says:

      As has been said in above comments, these are not orders. These are just potential customers expressing interest.

      One of Tesla’s goals here, perhaps its primary goal for hyping a product it’s currently not capable of producing in large numbers, may be to scare off potential competitors by convincing them that Tesla has cornered this market, a market which is just now beginning to show significant growth. But we’ve already seen similar offerings from other battery makers, so if that’s what Tesla’s goal is, then it’s not working.

      1. ModernMarvelFan says:

        The downside of that is to get your competitors all worked up so they will have plenty of time to build up their portfolio so they can be ready to compete against you…

        And if it doesn’t work in the future (fell short of expectation), you would have to spin it another way (due to other Model S/X/3 orders, we won’t be able to meet the Energy market demand…etc)

        I guess Tesla is very good at spinning the Wall Street around…

    2. Yoyodyn says:

      Here in TN is would not make much sense because power is about 9-11 cents/kwh. But in CA or TX where the daytime power costs are high (30c in CA from what I hear) or almost free at night (I’ve heard some places in TX drop to free at night because of the surplus) it might make sense and pay for itself.

      1. ModernMarvelFan says:

        Well, it would only work in a limited fashion in CA.

        The peak rating can be as high as $0.42/kWh. off peak rate is $0.099/kwh. That sounds good, right? (only summer, winter difference is only $0.19/kWh)

        If you already have solar, you are already enjoying the netmetering which already means that you would have “surplus” at the end of day. If that is the case, then you don’t get anything for those credits.

        The only case where it would work if those extra kWh is “net” more than you usage. But in those case, Power company will only pay you $0.06/kWh for them.

        So, the only people who would truly benefit if their current solar generation isn’t enough to cover their usage in credit (not in actual kWh) and they don’t have significant off peak usage.

        But even if we do, then you are talking about $3000 for 7kWh + inverter which is more than solar panels cost.

        @$2/W, you can easily generate 8-9kWh per day for the same $3000 investment in solar panels. So, the total output is higher and you won’t have to replace the battery (10yr warranty only).

        Also, with additional solar panel you gain the entire $0.40/kWh in credit, not the $0.30/kWh in difference (summer only).

        If you cycle them daily, then the backup functionality of the powerwall is reduced greatly since you would expect the battery to pump out all the power during the peak time and empty for the rest of the time until charged.

        Of course, this is all assuming that you have solar panels to start with.

        If you don’t, then you would need about 3x the system size to generate enough difference in peak/off peak price in order to pay for the system in about 7 years (without cost of the money) that includes the cost of installation and inverters. Assume we average $0.25/kWh difference per year (average out between winter and summer rate), then the math shows(7kWhx3x0.92×0.9×0.25= $4.35 per day). 0.92 is the 92% DC rountrip efficiency listed by Tesla. 0.9 is the AC to DC conversion efficiency (assuming only 1 direction which is pretty conservative).

        Either way, it isn’t a great financial investment for the current metering setup and cost. (since the battery is only warrantied for 10 years). Unless there is tax incentive for installing them, it just won’t make any investment sense in terms of financial return.

        1. See Through says:

          The batteries won’t help at all if you have solar. Solar produces a lot of power at the peak periods (1 pm to 7 pm in summer). So, if you have solar, you consume almost no “net” power from the grid at the high peak rates you mentioned.
          In winter, there is only part-peak from 5 p.m. to 8 p.m. so, it could be slightly helpful if you are on time-of-use plan.
          Vast majority of people are small electricity consumers, so they just pay a flat rate.

          1. ModernMarvelFan says:

            Well, it would help somewhat if your solar capacity is way smaller than your total usage and you also have “peak demand” that can’t be met by solar panels.

            Either way, the cost vs return is minimal considering the risk (with only 10 yr battery warranty).

          2. Steven says:

            They are a perfect solution to areas stricken by frequent but short power failures.

            [Insert personal attack here.]

            1. See Through says:

              And those places are the poorer countries with underdeveloped grid. They already have lead-acid type battery backups. What they need first is more power generation, not backups. Lack of enough power is why they have planned load sheddings. Backing up when power is there won’t solve anything, and will just lengthen the power cuts.

            2. ModernMarvelFan says:

              “They are a perfect solution to areas stricken by frequent but short power failures.”

              So, the 10kWh backup version cost over $5K to install.

              You can buy a very nice and much higher powered generator system for 1/3 of that price.

              1. Mathew Smith says:

                Maybe I missed something, but isn’t the overall dream/goal for Elon Musk to change the world towards renewable energy? I don’t doubt that your figures make sense…but how is the electricity from the grid generated in your areas? The idea is to have everything powered by renewable (solar, wind, hydro, geothermal, etc.) sources.
                And as a side note: does anyone here realize that solar absorption chillers can provide cooling directly through the sun’s thermal energy…and naturally we can heat water and even our homes…

      2. Pushmi-Pullyu says:

        Buying grid-level energy storage will always make sense for the utility, even if it is charging flat rates to its customers. In every market, utilities have to buy power to meet a temporary increase or spike in demand. Such purchases are always at a higher cost from on-demand power plants. If and when power companies can install enough energy storage capacity to eliminate the need for such on-demand chargers, then they will have lower operating costs.

        We have already seen recent news reports of a few electric utilities which are installing significant amounts of grid storage capacity. This market is poised to grow very, very rapidly when the price is right. Furthermore, it seems that the market is now on the cusp, nearing the tipping point of being ready for massive amounts of installed capacity for grid level energy storage.

        In my opinion, this market has the potential for growing much, much faster than the EV revolution is advancing. And if it does, and if Tesla does get its Gigafactory up and running by the beginning of next year, and if they can really produce battery cells at the cost reduction they’re aiming for… then maybe, just maybe, Morgan Stanley is right in saying that Tesla’s stock price isn’t inflated… that the company is actually worth more than the current market cap.

    3. Tech01x says:

      Tesla and Panasonic made a new agreement in late 2013 whereby Panasonic agreed to expand their cell supply out of their Osaka plants. Therefore, Tesla went from cell constrained in late 2013 to not cell constrained sometime in 2014.

      It is likely that Panasonic geared up in 2014 for an earlier Model X launch in 2015, which means that Panasonic was getting ready to deliver 4 to 5 GWh for 2015. With the Model X delays, it is likely that Panasonic has significantly more capacity. Combined with the commodity pricing drops and the USD/yen exchange rate changes, Tesla moved to the 70 kWh battery pack for the base model.

      The Tesla Energy division products de-risks the over-build of cell and battery production capacity. One can’t expand without some mismatch of capacity here and there and Tesla Energy products helps that along. It’s a great strategy.

      1. Pushmi-Pullyu says:

        Tech01x said:

        “Tesla and Panasonic made a new agreement in late 2013 whereby Panasonic agreed to expand their cell supply out of their Osaka plants. Therefore, Tesla went from cell constrained in late 2013 to not cell constrained sometime in 2014.”

        And then Tesla expanded its production capacity again, so almost certainly went back to being cell constrained within just a few months. If Tesla was no longer production constrained by cell supply, then why did they once again talk to Samsung about a supplemental cell supply?

  8. philip d says:

    One thing to remember is that most people interested in purchasing are aware that the federal tax credit for 30% of a pv or battery system ends at the end of 2016.

  9. Koenigsegg says:

    Nice

  10. Marc says:

    I reserved my Powerwall on day one with installation this fall (Oct?). Please read my article on fossil fuels:

    http://insideevs.com/july-4th-2015-day-independence-fossil-fuels/

  11. Bill says:

    They need my #airinductionchargingandstoragesystem to keep their system charge without stopping, can use 2-8 units with 240 volt of charging power each , can also be used to charge the battery instead of stopping for 30 min. to make it home. Why stop and wait when you can keep moving. When they make a 2battery system they won’t have to stop, can go coast to coast without stopping. Run on one battery while the other one is charging switch back and forth. If you can drive for 3-4 hours then you can charge for 3-4 hours. As soon as you reach 5-10 miles per hour it starts to charge.

  12. Carsten says:

    In light of all the utilities talking about fees for feeding into the grid and/or connecting Solar to the grid, thes battery system would make sense. Even older solar battery back up systems can be set such, that they are not feeding back to the grid. The new ones can switch on/off appliances/HVAC depending on solar production. This way, you are not a solar customer for the utility at all.
    I’m interested to see, how they will react to that.

  13. Rick says:

    I like what this company wants to do. And I support this direction 100 percent.

    It would be nice to finally be able to take control over energy usage than to rather be at the merci of oil and gas and electric companies who have cornered the market here in Canada.

    So I’m all in.