Tesla's Megapack grid batteries are close to selling out through 2027, and CEO Elon Musk says the company is pushing to build more of them. Demand is climbing as utilities and AI data centers seek more stable supplies of electricity.

"As much as possible"

On October 22, 2026, Musk wrote on X: "We are increasing production of Megapacks as much as possible." He said Tesla was nearly out of Megapack supply for 2027 before the year had even begun.

The remarks came one day after Tesla released its quarterly financial results, which showed the company setting a record for energy-storage orders and backlog even as revenue from the division declined.

Megapack, Tesla's grid-scale battery product, helps utilities manage swings in electricity demand and supply. The systems store surplus power and feed it back to the grid during periods of high demand or when renewable generation falls short. In June 2025, according to Cryptopolitan reporting, Tesla signed a $556 million energy-storage deal in Shanghai to help the city manage its electricity supply.

Revenue slipped even as deployments held

Tesla's energy business generated $2.881 billion in revenue in the third quarter of 2026, a decrease of 16% compared with a year earlier. Storage deployments, however, rose 10% to 13.7 GWhn
The company has begun producing Megapacks in Texas, which has a listed annual production capacity of 50 GWh. Its California plant has 40 GWh of capacity and its Shanghai plant 20 GWh, for a combined 110 GWh of installed capacity across the three sites. Those figures refer to installed capacity rather than batteries produced; equipment downtime and component shortages can hold back output — a gap that matters as Tesla works to fill a backlog now stretching through 2027.

Tesla has also delivered its first Megapacks using lithium iron phosphate cells produced at its Nevada manufacturing facility, a step intended to help secure its battery supply domestically.

What's driving the orders

Tesla says its storage technology can rapidly supply power to grids, calling it "critical to data center uptime" in its October 21 press release.

Evidence suggests the need is growing. The International Energy Agency (IEA) forecasts that electricity consumed by data centers will rise from 485 TWh in 2025 to 950 TWh in 2030, according to its report. The IEA has also reported 108 GW of battery storage installations worldwide in 2025, a rise of 40%. The buildout of solar and wind plants is adding to demand for energy storage.

Cheaper than gas, but China leads

On October 8, 2026, Wood Mackenzie reported that, across the 43 markets it evaluated, a four-hour battery was less expensive than an open-cycle gas turbine — a finding that gives utilities added incentive to invest.

Tesla nonetheless faces tough competition. Wood Mackenzie research published on June 29, 2026 found that Chinese companies captured 76% of global shipments of battery storage systems in 2025.

Demand doesn't guarantee profit

Tesla's overall Q3 revenue was nearly unchanged at $28.046 billion. GAAP net income attributable to common stockholders fell 43% to $787 million. Operating expenses rose 39% to $4.776 billion, while operating income dropped 56% to $718 million. Higher research spending and weaker regulatory-credit revenue weighed on results.

The orders are there. Tesla's challenge is building enough Megapacks to meet them while protecting its margins — a balance that will show up in the deployment and revenue figures of the company's upcoming quarterly reports.