Tesla: Trade tariffs will have ‘outsized impact’ on battery storage business, CFO says

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Tesla's energy storage business saw significant growth in Q1 2025, with revenues increasing by 67% year-on-year to $2.73 billion, despite a decline in automotive revenues and gross profit. The company deployed 10.4GWh of energy storage, marking a 154% increase from the previous year. However, Tesla's CFO, Vaibhav Taneja, highlighted that the energy segment faces greater risks from trade tariffs, particularly due to reliance on lithium iron phosphate (LFP) battery cells sourced from China. While Tesla is working on local manufacturing in the U.S., the current capacity is limited, and the company is also exploring non-China supply chains.

During an earnings call, CEO Elon Musk emphasized the importance of battery storage in enhancing energy output for utility companies, while also noting the challenges posed by tariffs. Analysts expressed concerns about potential project delays and the impact of tariffs on the energy sector, although some suggested that falling lithium battery costs might mitigate these effects. Tesla remains optimistic about the growing demand for energy storage solutions as electricity needs rise, positioning itself to capitalize on the electrification of the economy and advancements in technology.