Tesla's energy storage division is anticipated to be a bright spot in the company's upcoming quarterly report, offering a sign of resilience as the electric vehicle maker faces headwinds.
Analysts project the energy business will see a 25% increase for the quarter ending April 22, surpassing the expected 12% rise in automotive revenue. This performance comes as Tesla's core vehicle business grapples with declining margins and diminishing tax credits.
While Tesla's valuation heavily relies on future products like robots and autonomous vehicles, the energy segment's performance is noted to be inconsistent. "That tends to be a lumpy business, so it is hard to read too much into it until we get more detail on the next earnings call," stated Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Despite a 15% year-over-year decrease in energy storage deployments in early 2026, revenue for the segment is expected to grow. This is attributed to Tesla's strategic shift towards selling more profitable products, particularly large utility-scale Megapacks, which are more lucrative than residential Powerwalls. "A growing percentage of deployments is coming from large utility-scale Megapacks, which are much more lucrative than smaller residential Powerwalls or lower-priced systems," explained Scott Acheychek, COO of REX Financial.
Investors will be seeking insights into how the energy business is addressing industry-wide pressures. Morgan Stanley analysts cautioned that while growth is expected to remain robust, margins could face pressure due to pricing competition and challenges in passing on increased tariff costs.