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TSLA's Megapack Order Highlights AI Demand and Future Growth Potential

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Key Takeaways

  • TSLA secured an order for 260 Megapack 2XL units, providing about 1 GWh of storage capacity.
  • Deliveries are expected to begin in late 2027, with installations scheduled to become operational in 2028.
  • About 33 units have signed contracts, while 150 remain under negotiation, limiting revenue visibility.

Tesla (TSLA - Free Report) is gaining opportunities in the energy storage market as artificial intelligence (AI) data centers increase electricity demand. Per Teslarati, Taiwan-based power company Apollo Power has ordered 260 Tesla Megapack 2XL battery storage units, representing approximately 1 gigawatt-hour (GWh) of storage capacity. Apollo signed the contract with Tesla's Taiwan energy arm last week to support behind-the-meter energy storage and grid resilience projects. 

Deliveries are expected to begin in batches toward the end of 2027, with the installations scheduled to become operational in 2028. The companies have not disclosed the contract value, citing a confidentiality agreement. The order highlights the growing role of large-scale battery storage in supporting energy-intensive AI infrastructure. 

TSLA's AI Storage Business Builds on AI Demand

The Apollo Power agreement could strengthen Tesla's position in the energy storage market as AI data centers seek reliable power supplies. Battery storage systems help manage electricity demand, provide backup support and reduce dependence on grid availability.  

Per Teslarati, Apollo is also working with Phison, Gigabyte and Shihlin Electric on an AI data center and grid resilience alliance. The initiative builds on a pilot project at Phison's Zhunan facility, where Apollo and Tesla Energy Taiwan installed grid-forming Megapack 2XL units in June. Teslarati also notes that Megapacks support xAI's Colossus facility in Memphis and a 400-megawatt AI campus in Brazil. The Megapack 2XL has also been included in Nvidia's DSX Ready qualification for battery storage in AI factories. 

Tesla's broader storage capabilities could support further growth. Per Teslarati, the company has deployed more than 50 GWh of energy storage worldwide, while its Megablock offering targets commissioning 1 GWh of capacity in 20 business days.  

Energy Generation and Storage, led by Megapack and Powerwall, remains a key diversification lever. In the third quarter of 2026, Tesla deployed 13.7 GWh of energy storage products, up 9.6% year over year and 1.4% sequentially. Tesla says its order backlog remains robust, and Megafactory Texas is nearing production of Megapack 3 and Megablock, which should expand capacity. 

That company-wide momentum is separate from the Apollo deal, though, whose revenue contribution remains unclear.  

Competitive Landscape: Fluence Energy & Bloom Energy

Fluence Energy, Inc. (FLNC - Free Report) competes with Tesla in the grid-scale battery storage market, supplying energy storage systems, software and services for utilities and large energy projects. Per Reuters, Fluence was engaged in more than 30 GWh of data center-related projects globally as of May 2026. Yesterday, Fluence also announced an agreement with Vattenfall for a battery storage project in Germany with more than 1 GWh of capacity, scheduled to become operational by the end of 2028. 

Bloom Energy Corporation (BE - Free Report) competes in the broader AI data center power market through its fuel cell technology, which generates electricity onsite rather than storing electricity for later use. Its expanded partnership with MiTAC Computing in August 2026 will deploy fuel cell systems at an AI server manufacturing campus in Fremont, CA. It also announced yesterday that American Electric Power plans to invest approximately $4 billion in a 702-megawatt fuel cell project using Bloom's technology to supply Google under a 20-year power purchase agreement.  

The Zacks Rundown for Tesla

Shares of TSLA are down 14.3% in a year against its industry's 1.1% fall.

Zacks Investment ResearchImage Source: Zacks Investment Research

Tesla is currently trading at a forward 12-month price-to-sales of 12.53X, higher than the industry’s average of 3.34X. It carries a Value Score of F.

Zacks Investment ResearchImage Source: Zacks Investment Research

The Zacks Consensus Estimate for TSLA for 2026 earnings implies year-over-year growth of 1.2%.

Zacks Investment ResearchImage Source: Zacks Investment Research

The consensus estimate for EPS for fiscal 2026 has moved southward over the past 60 days.

Zacks Investment ResearchImage Source: Zacks Investment Research

TSLA currently has a Zacks Rank of #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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