Tesla, Inc. (TSLA.US) wins $5 billion order! Partnering with NatPower for European battery energy storage project.

Independent energy company NatPower and Tesla, Inc. (TSLA.US) announced on Tuesday that they have reached an agreement to build a total of 25 gigawatt-hours (GWh) of battery storage projects in Italy and the UK. This is the first phase of a plan with a total value of up to $5 billion. As the capacity of intermittent renewable energy generation continues to increase, European countries are accelerating the construction of battery storage projects to help balance power supply. Under this multi-year agreement, NatPower will utilize Tesla, Inc.'s Megapack large-scale battery storage system. NatPower will also use Tesla, Inc.'s power trading technology, which can manage when to buy and sell electricity. Both parties stated that five projects will be constructed initially as part of the first phase of the overall plan. The ultimate goal of the plan is to achieve over 100 GWh of storage capacity, with estimated construction costs of $4 billion to $5 billion. The two companies also added that the project is expected to generate cumulative revenue of over $15 billion over the next 20 years. NatPower CEO Fabrizio Zago said, "The industry doesn't lack technology and capital, but it's still difficult to consistently deliver infrastructure projects on time and as required. What we are building with Tesla, Inc. is an ecosystem that can coordinate capital with execution, and this model can be replicated in multiple markets." With pressure on the growth of Tesla, Inc.'s automotive business, the energy storage business is becoming an important engine for driving Tesla, Inc.'s performance growth. Energy storage is one of the areas Tesla, Inc. has focused on in recent years. In the first quarter of this year, Tesla, Inc.'s energy storage business had an installation volume of 8.8 GWh, a 15.38% decrease from the same period last year. However, the gross margin for this business in the first quarter was 39.5%, reaching a new high. Despite the year-on-year decrease in installation volume in the first quarter, Tesla, Inc. CFO Vaibhav Taneja stated that the full-year energy storage installation volume is expected to be higher in 2026 than in 2025. Last year, Tesla, Inc.'s energy storage business had an installation volume of 46.7 GWh, a 48% increase from the previous year. In the first quarter of this year, Tesla, Inc.'s energy storage business expansion made progress. The construction of the energy storage super factory in the outskirts of Houston, USA is progressing smoothly, and the factory will produce the third-generation Megapack energy storage system called Megablock, which is expected to start production later this year. In addition, Tesla, Inc. previously announced plans to build a 100 GWCECEP Solar Energy manufacturing capacity in the US by 2028, and there have been reports that Tesla, Inc. has been in negotiations with Chinese suppliers for the production equipment of CECEP Solar Energy.