Tesla's energy storage division is expected to shine when the company reports its quarterly results this week, offsetting challenges in its core automotive business. According to Reuters, the energy business is growing faster and is roughly twice as profitable as Tesla's aging lineup of cars, thanks to demand for large-scale battery systems to power data centers.
Key Takeaways
Tesla's energy storage division is expected to outperform its core automotive business when the company reports quarterly results. The division is growing faster and is roughly twice as profitable due to demand for large-scale battery systems.
- Tesla's energy business expected to grow 25% this quarter
- Energy storage revenue projected to reach $18.3 billion by 2026
- Automotive margins have shrunk, with regulatory credits declining
- Tesla expanding robotaxi service to Dallas and Houston
The unit's revenue will account for about a fifth of expected total revenue this year, with Wall Street estimating it will generate about $18.3 billion in revenue in 2026, up from $12.8 billion in 2025. Gross profit is expected to rise to roughly $5.3 billion with margins holding near 29%, as reported by Reuters.
Meanwhile, Tesla's vehicle profitability has shrunk from its peaks, and high-margin regulatory credits have declined following policy changes in the United States under President Donald Trump. CEO Elon Musk's plans to build new assembly lines and produce robots are expected to cost $20 billion this year and drive Tesla to its first quarter of negative cash flow in two years, per Reuters.
TimesLIVE reports that Tesla is expanding its robotaxi service into Dallas and Houston, marking further expansion since its Austin launch last year. The company posted videos showing Model Y SUVs running without human drivers or monitors in the front seats but did not disclose details such as fleet size or pricing.
CNBC highlights that Tesla's roughly $1.5 trillion valuation rests on products that don't yet exist, including robots and fully self-driving cars. The energy storage deployments were 8.8 gigawatt-hours in the first quarter of 2026, down 15% from a year earlier, but revenue for the segment is expected to rise as Tesla focuses on selling more profitable products.
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