Tesla’s energy products are quickly becoming an increasingly important part of the company’s portfolio. Some, including Elon Musk, believe Tesla’s energy products may eclipse its auto business in the coming years. Only furthering that growth, Tesla has now introduced a price cut to its in-demand commercial energy storage system, the Megapack.
First reported by Sawyer Merrit on Twitter, Tesla has slashed the price of the Megapack by $30,000. The Megapack (without installation) now starts at $1,879,840. However, Tesla has pushed back the delivery time, maintaining its 2-year wait list for the popular energy product, which will now be delivered in Q1 2025 if ordered today.
There are three primary reasons that Tesla may now be inclined and able to introduce a price cut to the Megapack, despite the less favorable macroeconomic conditions. Foremost, Tesla has been able to dramatically ramp production of the Megapack at its newest facility in Lathrop, California. By ramping production, the company can cut costs by ordering and producing more parts in bulk, hence allowing for the subsequent price cut.
Secondly, the energy storage market has never been more competitive, both within the commercial and consumer space. Countless new competitors have entered the market since Tesla pioneered the system, and with this added competition, Tesla is likely aiming to undercut other market offerings.
Third and finally, lithium prices, particularly in the United States and China, have fallen precipitously since Q4 of last year. Lithium makes up a significant proportion of the production cost of the Megapack, and with its dramatic reduction, thanks to the rapid expansion of lithium extraction, the Tesla energy system can, in turn, come down in price as well.
Tesla’s Megapack grid-scale energy storage systems have been deploying all over the world, and the company has recently reduced the price of one variant of the giant battery by tens of thousands of dollars.
Tesla has seemingly dropped the price of its two-hour Megapack configuration by about $42,500, as spotted on Friday by Sawyer Merritt. The total price of a single two-hour Megapack unit is now estimated to be $1,278,860 when the install location is set to California, as can be seen on Tesla’s Megapack configurator page. The price can vary quite a bit depending on the state in which it’s installed, ranging to as high as $1,366,970 when the location is set to Alaska, for example.
Buyers can either order a Megapack in either two-hour or four-hour durations, with the latter option costing $1,227,090 in California. The two options offer different specs for power and energy ratings, as well as round trip efficiency, as can be seen below from Tesla’s website:
Additionally, Tesla also lets you select whether or not you want the purchase to include installation, which can add a substantial amount to the order but lets the company take care of several adjacent needs for buyers. For a single, two-hour Megapack unit, for example, installation brings the total estimated cost to $2,081,060 in California, adding $802,200 in installation costs.
Tesla notes on the page that installation includes electric and civil design efforts, project permitting, construction, commissioning, and the addition of backup capabilities for critical load levels.
Buyers can also select the quantity of Megapacks they hope to install, with the price per unit dropping with each unit added. To buy a pair of two-hour Megapack units in California without installation, the estimated price lands at $2,526,640 for a per-unit savings of $29,080.
Tesla has been ramping up Megapack production at its so-called “Megafactory” in Lathrop, California, with as many as 339 of the giant battery units being spotted at the end of December. The company has also debuted a second Megafactory, located near its automotive plant in Shanghai, China, with a signing ceremony held last month.
The official order page for Tesla’s Megapack has gone live, revealing pricing and more for the utility-scale energy storage solution — reports The Street.
Details on the Megapack have been in short supply up until now since, unlike the more consumer-focused Powerwall, the Megapack has largely been a business-to-business product.
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