Tesla's battery storage profits now outpace vehicle margins as Texas Megapack factory begins output

Tesla's energy business is becoming a more profitable operation than vehicle manufacturing. The company has commenced Megapack 3 battery production at its Brookshire, Texas facility, which can manufacture 50 gigawatt-hours of capacity each year. Storage deployments in the second quarter grew 41% year-over-year to 13.5 gigawatt-hours, substantially exceeding the 25% growth rate for vehicle sales. Energy products generated a gross margin of 28.7% against 18.7% for automotive sales, a gap that matters as Tesla invests heavily in artificial intelligence development, autonomous vehicle technology, and robot manufacturing while contending with vehicle pricing pressure.

1. The Brookshire, Texas Megapack factory began operations 16 months after its groundbreaking, with annual production capacity of 50 gigawatt-hours
2. Tesla deployed 13.5 GWh of storage in Q2, representing 41% growth from 9.6 GWh in the prior year
3. Vehicle deliveries totalled 480,126 units in Q2, up 25% year-over-year
4. Energy operations achieved a 28.7% gross margin versus 18.7% for automotive in the first half of 2026
5. Tesla invested approximately 44 million for building improvements and 150 million for manufacturing equipment under a Waller County tax-abatement agreement
6. The U.S. Energy Information Administration projects 24 gigawatts of utility-scale battery storage will be added nationwide in 2026, with Texas accounting for 12.9 GW