Tesla blames solar slump on interest rates as energy storage biz booms

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Tesla informed investors on Wednesday that its solar installations are continuing to decline.

The car manufacturer announced that it had installed solar power systems with a capacity of 66 megawatts in the second quarter of 2023. This figure represents a decrease of 1 megawatt compared to the first quarter and a decrease of 40 megawatts compared to the second quarter of 2022. To put it simply, the number of Tesla solar installations dropped by around 37% from Q2 2022 to Q2 2023.

Tesla stated that the decrease in sales compared to the previous year was mainly attributed to the prevailing high interest rates, which have led customers to delay their solar purchases across the entire industry. However, when it comes to the deployment of their energy solutions, Tesla's performance tells a different tale.

In Q2 2023, Tesla announced a remarkable increase of 222% in their energy storage installations, reaching a capacity of 3.7 GWh. Although this growth was not as striking as the previous quarter's surge of 360%, Tesla's energy storage division continues to thrive. The company attributed this progress to the ongoing expansion of our dedicated Megapack factory (also known as Megafactory) located in Lathrop, CA.

Tesla's energy business achieved almost the highest revenue ever recorded during the second quarter, an accomplishment that surpasses the previous record set in the first quarter. The company disclosed earnings of approximately $1.51 billion from its energy division in Q2, showing a slight decrease from Q1 2023's $1.52 billion but a significant increase compared to the $866 million reported in Q2 2022.