Tesla is introducing new versions of its utility-scale batteries in a bid to regain momentum in its energy-storage division.
Megapack 3: More Power, Longer Life
The new Megapack 3 battery can store around one megawatt-hour more electricity than Tesla’s previous largest model. It also promises improved durability and an updated thermal management system, enabling it to operate in temperatures ranging from –40°F to 140°F.
Tesla also revealed Megablock, a system made up of four Megapack 3 units. With a capacity of 20 megawatt-hours, it can power about 4,000 homes for four hours. According to Tesla, Megablock reduces installation time by 23% and overall construction time by up to 40%.
Battery cells for both products will be sourced from the United States, Southeast Asia, and China.
Production Timeline and Market Context
Both Megapack 3 and Megablock will be produced at Tesla’s Megafactory near Houston, with manufacturing set to begin in the second half of 2026. The factory is expected to have the capacity to produce up to 50 gigawatt-hours annually.
Tesla reported two straight quarters of declining energy-storage sales this year, despite being the market leader in 2024. Meanwhile, the broader energy-storage sector has continued to grow rapidly, according to analysts at Wood Mackenzie.
Tesla’s Megapacks already have a foothold with utilities and large-scale users. Notably, Elon Musk’s AI firm, xAI, installed 168 Megapacks at its South Memphis data center last year. While xAI has considered adding more, reports suggest it is also exploring gas turbine alternatives.
What The Author Thinks
Tesla often makes headlines for its cars and Musk’s ventures, but its real long-term test may be energy storage. Megapack 3 and Megablock show Tesla is aware of rising competition and customer demands. If it can deliver on performance and cost, these products could cement Tesla’s role in stabilizing power grids worldwide. But delays until 2026 could give rivals a crucial head start.
Featured image credit: DonanimHaber
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