Tesla’s energy storage business gets sucked into the company’s downward spiral

Tesla’s energy storage business, once a consistent growth area for the company, is now experiencing a decline amid broader challenges facing Tesla. In the second quarter of 2025, deployments of Tesla’s Powerwall and Megapack products fell by 0.8 gigawatt-hours compared to the first quarter, marking a downturn for the second consecutive quarter. In 2024, Tesla deployed a total of 31.4 GWh of energy storage products, but the recent drop signals an end to the previous trend of year-over-year growth in this sector. This decline contrasts with the overall energy storage market, which saw a 57% year-over-year increase in new installations in the first quarter of 2025. Several external factors contribute to Tesla’s energy storage struggles. Tariffs on Chinese-made goods and potential legislative changes in the U.S. Congress threaten to undermine tax credits that have supported battery storage growth. The Inflation Reduction Act’s benefits may be curtailed by new restrictions on parts or materials