Tesla Pushes Megapack Output as 2027 Storage Capacity Nears Sellout

what happened

According to Stocktwits, Elon Musk said on Thursday that Tesla is boosting Megapack production to the highest level it can reach, as orders for energy storage systems have filled nearly all of the capacity for 2027 before that year has even begun.

In the third quarter Tesla installed 13.7 GWh of storage, the company's second-best result on record. Revenue from its energy generation and storage unit came to $2.88 billion, down 16% from a year earlier, a decline partly tied to refunds to customers over tariffs. Even so, the segment's gross margin climbed to 33.1% from 20.4% in the prior quarter, helped by higher prices and warranty adjustments.

Demand is driven largely by AI data centers, which need fast and dependable power and storage. The company reported its highest order intake and backlog ever for storage products. Its new Texas plant has started output with a planned yearly capacity of 50 GWh, and together with sites in California and Shanghai, total nameplate capacity is roughly 110 GWh. Morgan Stanley raised its price target on the stock to $410 from $400, and TSLA shares are down 17% so far this year.

why it matters

For markets, the update suggests storage is becoming a bigger part of Tesla's business and could support margins as data centers push up power needs. The shares remain 17% lower year to date, while retail sentiment on Stocktwits turned more bullish over the past day. Investors will be watching whether margins keep improving as production expands.

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