Interview Transcript

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Can you explain to me the difference?

In the United States, they (Tesla) have the lion's share of the home energy storage market, with 70% to 80% of battery systems in homes being Powerwalls. This is because it's easy, more affordable, and the power and energy you get for the price is still the best in class. Powerwall 3 will only improve this further.

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Can you explain why utilities purchase both Powerwalls and Megapacks? What's the difference, and when would they purchase one over the other?

The agreement was that the utility could manage the battery when the grid is up, meaning they can increase or decrease the load at the customer's house as the grid operator. If the power goes out, the homeowner can use whatever energy is left in the battery during the outage. The goal is to have an aggregated virtual power plant with all the residential Powerwall homeowners, so they can control all of them with one command, either charging or discharging. They want the cost of generating energy through this method to be less than buying electricity on the open market or generating it at their other sites. Utilities can quickly look at their avoided costs and determine the economic viability of this model.

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What's the business model? You sell the hardware, and I assume it's sold at a profit.

Tesla is trying to chase the profit margin on the Powerwall, which was around 30% when I was there. It could be a little more or less, but they aimed for above 30%.

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