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Tesla's Recent UK Megapack Deal to Supercharge Its Energy Business

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Key Takeaways

  • Tesla secures 1 GWh Megapack project with Matrix Renewables in Scotland.
  • UK grids will use Tesla's storage to balance intermittent solar and wind power.
  • Tesla Energy grew 113% YoY in 2024, being profitable for 14 straight quarters.

Tesla (TSLA - Free Report) has secured a 1 GWh Megapack project with Matrix Renewables in Scotland. The project will be built in Eccles and will use a 500 MW, two-hour standalone battery energy storage system. For Matrix Renewables, this will be its first standalone battery storage project in the UK. For Tesla, it is another clear win in a market that has quietly become one of its strongest for energy storage.

Why the UK Deal Matters

The UK grid is turning into a real-world test case for renewable power. As the country pushes toward its Net Zero 2050 goal and Clean Power 2035 ambition, it needs reliable ways to balance intermittent solar and wind generation. That is exactly where Tesla’s Megapack comes in. Large-scale batteries allow utilities to store excess energy when supply is high and release it when demand spikes. This makes renewables far more practical at scale.

The company has been ramping up production at its Lathrop Megafactory in California specifically to meet growing global demand for grid-scale storage. Last year, Tesla landed a massive multi-billion-dollar contract to deploy more than 15 GWh of Megapacks for Intersect Power in California.

Tesla Energy Is Doing What EVs Aren’t Right Now

While Tesla’s electric vehicle (EV) business is dealing with softer demand and pricing pressure, its energy segment is doing the opposite. Projects like this highlight why Tesla Energy and storage have become a bright spot for the company. This is thanks to the strong reception of its Megapack and Powerwall products — lithium-ion battery energy storage products. Powerwall is designed to store energy for homes and small commercial facilities, while Megapack serves larger-scale energy needs for commercial, industrial and utility customers.

The numbers behind Tesla Energy are hard to ignore. Energy storage deployments have surged at a compound annual growth rate of 180% over the past three years. In 2024 alone, deployments jumped 113% year over year. CEO Musk expects deployments to grow another 50% at least for the full year. In the third quarter of 2025, Tesla deployed 12.5 GWh of energy storage, up 81% year over year.

Just as important, this growth is profitable. Tesla Energy became profitable in mid-2022 and has now delivered profits for 14 straight quarters. In 2024, the Energy Generation and Storage segment posted gross margins of 26%, the highest across Tesla’s businesses. Lower material costs and operating leverage are helping keep margins strong.

As power grids strain and renewables expand, Tesla’s energy business is becoming a core pillar — and right now, it may be the company’s most reliable source of growth.

TSLA’s Competitors in This Space

Fluence Energy (FLNC - Free Report) and Enphase Energy (ENPH - Free Report) are key competitors to Tesla’s energy and storage business.

Virginia-based Fluence Energy is one of the global leaders in utility-scale energy storage and a direct competitor to Tesla’s Megapack. The company operates in a fast-growing market, driven by the global shift toward renewable energy. Fluence provides large-scale battery systems, AI-driven software, and grid services to utilities and energy developers worldwide. Its new Smartstack platform and partnership with Cordelio Power to deploy 1 GWh of domestically manufactured battery storage further strengthen its competitive position.

Enphase Energy, headquartered in Fremont, CA, competes more closely with Tesla in the residential energy storage market. The company designs and sells home energy solutions that integrate energy generation, storage, monitoring, and control into a single intelligent platform. Known for its solar microinverters, Enphase has expanded into home battery systems, offering solar-plus-storage solutions that help homeowners reduce reliance on the grid and better manage energy consumption.

TSLA’s Price Performance, Valuation and Estimates

Shares of Tesla have gained around 12% over the past year, underperforming the industry.

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From a valuation standpoint, TSLA trades at a forward price-to-sales ratio of 15.27, way above the industry. It carries a Value Score of D.

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See how the Zacks Consensus Estimate for TSLA's EPS has been revised over the past 90 days.

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Tesla stock currently carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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