Tesla revamps the Megapack in attempt to reverse its declining storage business

Tesla has unveiled an updated version of its utility-scale battery system, the Megapack 3, aiming to revitalize its energy storage business amid recent declines. The Megapack 3 offers approximately 1 megawatt-hour more storage capacity than Tesla’s previous largest model and features an improved thermal management system that enables operation in extreme temperatures ranging from –40˚F to 140˚F. Additionally, Tesla introduced the Megablock, a configuration of four Megapack 3 units that can store 20 megawatt-hours, designed to reduce installation and construction times by 23% and up to 40%, respectively. Production of these new products will begin in the latter half of 2026 at Tesla’s Megafactory near Houston, which will have an annual capacity of up to 50 gigawatt-hours. Tesla’s energy storage segment, once the industry leader in 2024, has experienced a slowdown as competitors rapidly expand their market share. The company installed 9