Pioneer of the electric vehicle
seems to have suffered a setback in another of its activities. A fire has been reported at one of Tesla’s stationary electricity projects in Australia.
This setback, however, is also a reminder that Tesla’s ambitions extend far beyond cars.
A Tesla mega-pack (ticker: TSLA) – which is essentially a huge collection of rechargeable batteries for large-scale energy storage – caught fire in Australia during a project called the Victorian Big Battery, Reuters reported. The battery can store 450 megawatt hours of energy, which is equivalent to 4,500 Tesla vehicles connected together.
A battery installation of this size can power, perhaps, 150,000 homes for a year. This estimate, of course, depends on a few factors, such as average household consumption.
(NEOEN.France), the French public service which manages the reserve, was not immediately available to comment on the fire.
Tesla stock isn’t taking a hit. News on stationary electricity doesn’t seem to move the stock much. Shares are up 2% at midday. the
is about 0.5%, and the
Dow Jones Industrial Average
lost 0.4%. Tesla stock builds on early week gains, after the company released better-than-expected second-quarter numbers on Monday night. Tesla shares have gained around 7.4% for the week so far.
was up about 0.6% in overseas trade on Friday.
Tesla and Neoen have other projects in Australia, such as the Hornsdale power reserve. The reserve stores electricity for the Hornsdale wind farm. Adding battery storage to renewable energy production, such as wind and solar, can integrate renewable resources into baseload generation capacity.
For now, Neoen calls Hornsdale the largest reserve of storage batteries in the world. The large Victorian battery is still under construction. The first stage of the Hornsdale project is a 100 megawatt battery. The second phase of the project is another 50 megawatt battery.
Tesla CEO Elon Musk has spoken on several occasions about the importance and opportunities for his business in the stationary electricity market, even though Tesla vehicles still grab the headlines. A 2015 letter to Tesla shareholders called the total addressable market for stationary storage products “huge and much easier to scale globally than vehicle sales.”
On the company’s Battery Technology Day in September 2020, Musk said, “Less than 0.1% of [potential] stationary storage has been done… stationary storage has barely started, the conversion of the world’s fleet of vehicles to electric has barely begun. Tesla has a lot of opportunity for the growth of stationary energy.
And last week on the company’s earnings conference call, Musk again added that “we have significant unmet demand for stationary storage.” Battery power is one of the brakes on the business. For now, Tesla is prioritizing building cars over stationary batteries.
However, stationary storage activity is growing: Tesla deployed 1,274 megawatt hours of storage in the second quarter of 2021, compared to 419 megawatt hours deployed in the second quarter of 2020.
Energy Generation and Storage (how Tesla presents its stationary electricity business) sales were $ 653 million in the second quarter, up from $ 225 million a year earlier. But, company-wide, Tesla’s total sales amounted to nearly $ 12 billion in the second quarter of 2021.
Storage is only a small piece of the pie, for now.
Write to Al Root at [email protected]