Does Tesla’s Energy Business Compare Favorably With SunPower?

by Trefis Team
Tesla Motors
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Tesla’s (NASDAQ:TSLA) Energy Generation and Storage Segment, which accounted for ~5% of the company’s total revenue in 2018, sells solar panels and energy storage systems to residential and commercial customers. Tesla’s energy revenues are smaller compared to SunPower, one of the largest U.S. solar companies ($1.6 billion vs. $1.8 billion in 2018). While Tesla’s growth is being driven by its storage solutions, such as the Power Wall, the company’s solar installation business has been posting sizable declines. In comparison, SunPower is seeing its solar deployments rise. Tesla’s energy segment gross margins are slightly higher than SunPower’s gross margins (12% vs 7.5% in 2018). Below, we provide more details on how Tesla’s energy business compares to SunPower’s.

View our complete dashboard analysis How Does Tesla’s Energy Business Compare With SunPower?

SunPower’s Total Revenues are higher than Tesla’s Energy business revenues, although they have been trending lower

  • Tesla’s Energy business revenues have increased from $0.2 billion in 2016 to $1.6 billion in 2018, driven by its acquisition of SolarCity in late 2016 and higher sales of its storage solutions.
  • SunPower’s revenues have declined from $2.7 billion to $1.8 billion as the company reduced its exposure to larger-scale projects.

Tesla’s solar capacity deployed has been trending steadily lower, while SunPower is seeing installations gain

  • Tesla’s installations have trended steadily lower since it acquired SolarCity, as it downsized the residential solar installation business, and has been slow to scale-up production of new products such as the Solar Roof, which embeds photovoltaic cells into glass roof tiles.
  • SunPower’s installations have been rising, driven partly by the introduction of its next-generation technology panels.

For more details and charts on Tesla’s solar business view our dashboard How Does Tesla’s Energy Business Compare With SunPower?

Tesla’s Storage business is larger than SunPower’s, and likely accounts for a bulk of its energy revenues

  • Tesla’s storage business has seen significant growth, with deployments rising from 358 megawatt-hours in 2017 to 1121 MWh over the first 9 months of 2019.
  • SunPower, which reports its storage deployment in MW, has seen its number grow from 25 MW in 2018 to 44 MW over the first nine months of 2019.

Gross margins for Tesla’s storage business have largely been higher compared to SunPower’s

  • Gross margins for Tesla’s Energy business have risen from about 2% in 2018 to 12% in 2018 and stood at about 13% over the first nine months of 2019.
  • SunPower’s Gross Margins have ranged from 7.5% to 11%
  • Tesla’s higher margins are likely due to its focus on storage and more differentiated solar products.

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