Tesla Signals More Data Center Battery Sales in Latest Earnings Call

Tesla reported lower-than-expected profits and rising capital expenditure as it expands into the data center energy market. The company posted quarterly revenue of $28.2 billion after delivering around 480,000 vehicles, while operating costs rose 47 percent to $4.35 billion.

"The energy business is also growing incredibly fast, and I think will be crucial for the scale-up of artificial intelligence data centers," CEO Elon Musk said in an earnings call. "We're investing a lot in growing the core business and really preparing for the future. So this is a massive capex year, but I'm confident that all the things that we're investing in will yield incredible returns."

Musk described Tesla’s energy business backlog as “robust,” saying the company will build for both current demand and expected growth from data centers and broader electrification. He said hyperscalers are struggling to secure and stabilize power for AI workloads, noting that training runs can cause rapid swings in electricity demand. Tesla believes advanced power electronics can help smooth these fluctuations.

Musk said SpaceX has bought Tesla Megapacks for its data centers, primarily to smooth power fluctuations during AI training runs. SpaceXAI, formerly xAI, has deployed Tesla Megapacks at its Colossus data centers, with 168 installed last year. Tesla also filed a trademark for a modular data center hardware system called Megapod in June.