Tesla revamps the Megapack in attempt to reverse its declining storage business | TechCrunch

"Tesla is updating its utility-scale Megapack batteries as it seeks to stem the decline of its lucrative energy storage business. The new battery product known as Megapack 3, which Tesla revealed late Monday, are a bid to lure utilities and data center developers that are desperate for power. Megapack 3 stores around 1 megawatt-hour more electricity than Tesla's largest existing offering and promises a longer lifespan."

"Tesla also introduced Megablock, a grouping of four Megapack 3 units that can store 20 megawatt-hours. The grouping should reduce installation times by 23% and construction times by up to 40%, the company said. Cells for the battery packs will be sourced from the U.S., Southeast Asia, and China. By updating the thermal management system, Megapack 3 will be able to operate from -40˚ F to 140˚ F, specs that should cover just about everywhere on Earth."

"Investors will have to wait a while to see any impact on Tesla's balance sheet, though. Both products will be manufactured in Tesla's Megafactory near Houston and won't enter production until the latter half of 2026. Tesla's energy storage business could use a shot in the arm after reporting two consecutive quarters of declining numbers this year. The company was the leading supplier of battery energy storage systems in 2024, though its lead was slipping even then, according to Wood Mackenzie."

Tesla introduced Megapack 3 to increase per-unit storage by roughly 1 megawatt-hour and extend lifespan. Tesla also introduced Megablock, a four-unit grouping that stores 20 megawatt-hours and reduces installation times by 23% and construction times by up to 40%. Cells will be sourced from the U.S., Southeast Asia, and China. Improved thermal management enables operation from -40°F to 140°F. Manufacturing will occur at Tesla's Megafactory near Houston with production starting in the latter half of 2026 and potential capacity up to 50 gigawatt-hours per year. Tesla installed 9.6 gigawatt-hours last quarter and reported two consecutive quarters of declines in energy storage this year. xAI deployed 168 Megapacks at a South Memphis data center while also exploring additional gas turbines.

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