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

Core Insights - Tesla is launching the Megapack 3 and Megablock to revitalize its energy storage business, which has seen a decline in recent quarters [1][3] - The Megapack 3 offers increased storage capacity and a longer lifespan, while the Megablock combines four units for enhanced efficiency [2][3] - Production of these new products will begin in the latter half of 2026 at Tesla's Megafactory in Houston, which has a capacity of 50 gigawatt-hours per year [3][6] Product Details - Megapack 3 stores approximately 1 megawatt-hour more electricity than Tesla's largest current offering and features an updated thermal management system [1][2] - The Megablock configuration allows for 20 megawatt-hours of storage and reduces installation times by 23% and construction times by up to 40% [2] - The operational temperature range for Megapack 3 is from –40˚ F to 140˚ F, making it suitable for diverse environments [2] Market Context - Tesla's energy storage business has reported two consecutive quarters of declining performance, despite being the leading supplier in 2024 [3] - The overall energy storage industry is experiencing rapid growth, indicating potential opportunities for Tesla to regain market share [4] - Tesla installed 9.6 gigawatt-hours of stationary energy storage last quarter, highlighting its current operational scale [6] Strategic Partnerships - Tesla's energy storage solutions may benefit from internal demand from xAI, which has already integrated 168 Megapacks at its data center [7]