Tesla Motors Inc unveiled Tesla Energy – storage systems or batteries for homes, companies and utilities that will expand its business beyond electric vehicles and tap into a fast-growing area of the energy industry, Reuters reported on Friday.
Chief Executive Elon Musk said the company’s goal was to “fundamentally change the way the world uses energy on an extreme scale.”
In Tesla’s view, such storage systems could become part of a fossil-fuel-free lifestyle in which people can have solar panels on their roof generating electricity to power their home and recharge their electric car batteries.
The smallest battery unveiled on Thursday (US time), known as Powerwall, is housed in a six-inch-wide container that is meant to be hung inside a garage or on the outside wall of a house.
At $3,500 for a 10kWh model, excluding inverter and installation prices, the Powerwall can be used for backup power or to store solar energy.
Tesla’s lead installation partner for the home battery will be SolarCity Corp, the solar installer backed by Musk. The company will also partner with many others, Musk said.
Tesla has several hundred batteries installed with SolarCity systems in California already. The growth of those projects has been helped by a subsidy from California’s public utility regulator.
Utilities have also been seeking out energy storage to help manage increasing amounts of renewable energy on the grid.
To address that market, Musk unveiled what he called the “power pack,” a 100 kWh battery block that is meant to help smooth out power from intermittent solar and wind energy production or add energy to the grid quickly when demand levels are high.
Tesla already has several utility-scale batteries deployed on the grid in California, which requires its biggest utilities to source large amounts of energy storage.
Musk said that Tesla expected to have a low but growing gross margin in battery products in the fourth quarter of 2015 and noted that battery products would be “materially profitable” next year.
Tesla will initially manufacture the batteries at its automobile factory in California but will move production to its planned “gigafactory” in Nevada next year.