The slowdown in the electric vehicle sector has also affected Tesla’s energy storage business. The company’s second-quarter data showed that installations of products such as the Powerwall and Megapack decreased for the second consecutive year.

Tesla’s energy storage is doing poorly

In the second quarter of 2025, Tesla installed a total of 9.6 gigawatt-hours (GWh) of energy storage systems. This figure represents a decrease of 0.8 GWh from the 10.4 GWh recorded in the previous quarter.

Tesla reached its highest level of energy storage installations in the last quarter of 2024. The company installed 11 GWh during that period, closing the year with a total of 31.4 GWh. This area has been one of the areas where Tesla has seen rapid growth in the past and has attracted the attention of investors.

Revenue from energy products, which was $2 billion in 2020, increased to $10.1 billion in 2024. However, the decline in the first half of 2025 shows that this growth is losing momentum.

The overall market picture is following a different direction than Tesla. According to Wood Mackenzie data, global energy storage installations increased by 57 percent on an annual basis in the first quarter of 2025, reaching a new record level. This increase shows that other players in the sector continue to grow, while Tesla remains outside this trend.

However, growth in the market may also come under pressure in the future. New tariffs applied to products of Chinese origin in the US and some regulations on the agenda of Congress pose a risk to the sector. Within the scope of Trump-backed bills, the cancellation of some incentive provisions of the Inflation Reduction Act is being discussed.

Accordingly, tax incentives may be removed if the critical minerals used in batteries are of foreign (especially Chinese) origin. If this regulation is implemented; costs will increase and competitiveness will decrease for companies that are heavily dependent on China in battery production.

This decline in Tesla’s energy side is parallel to the decline seen in the company’s general financial performance. Tesla’s growth strategies have faced new challenges due to the weakening of electric vehicle sales, the decline in demand for the Cybertruck model, and the impact of macroeconomic conditions.