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derefr • today at 5:00 PM • 0 replies • view on HN

FYI, Tesla makes a large fraction of its profits off the margins from selling grid-scale ("Megapack") batteries to utilities; renewable energy projects (buffering energy generated by e.g. private wind farms); and most recently, data centers (where they act either as giant battery-backed UPS systems, or as reservoirs between on-site power generation and fluctuating on-site demand.)

They probably have also been trying to penetrate the military energy storage market (a.k.a. "tactical microgrids"), but so far they haven't. They need more vertical integration for that. Right now they don't own battery-cell manufacturing, so the defense contractors that build ruggedized battery packs skip them and go straight to sourcing from the battery-cell manufacturers.

(Fun fact: Tesla's Gigafactories as physical spaces produce a ton of battery cells, but Tesla itself doesn't. Tesla leases space in its Gigafactories to cell manufacturers like Panasonic, who actually produce the cells, so that Tesla can then directly consume some of the cells produced into battery packs, without any intervening logistics costs.)

It's always been my own personal stance that Tesla is a battery company, that happens to sell some of its battery packs in the form of cars. (Remember that 80% of the depreciated value of an EV is its batteries.) The cars were never the core of Tesla's business model; they were a useful vertically-integrated B2C demand-sink they used to bootstrap their B2B battery sales business.