Tesla Megablock Is a ‘Game-Changer.’ The Stock Is Rising.

Tesla deployed 37.9 gigawatt hours of battery storage capacity over the past 12 months, up 83% year over year. (ALEX MARTIN/AFP via Getty Images)

Tesla recently unveiled important new products that weren’t cars, but represent a “game-changer” for the company’s energy storage business.

Monday, Tesla unveiled its “Megapack 3” and “Megablock.” Megapacks are Tesla’s battery-based utility-scale energy storage platform.

Batteries can essentially turn wind and solar power generation assets into more reliable power by storing energy when the wind isn’t blowing or the sun isn’t shining. Battery storage is part of Tesla’s plan to achieve “sustainable abundance via sustainable energy.”

Megapack 3 is the company’s latest battery storage with updated battery cells and electronics technology. Megablock is a pre-engineered system that integrates batteries, switch gears, and transformers into one system, resulting in 23% faster installation and 40% lower construction costs, according to Tesla.

“Tesla’s new Megablock does what Tesla does best, leverage the company’s manufacturing expertise, simplify, and vertically integrate,” wrote William Blair analyst Jed Dorsheimer in a Wednesday report. “This is a game-changer for grid storage customers and a strong data point from our bullish thesis on the energy storage business.”

Tesla’s energy storage business generated sales of about $11 billion over the past 12 months, up 43%. It deployed 37.9 gigawatt hours of storage capacity over the past 12 months, up 83% year over year. That’s enough energy to power about 4,000 American homes for a year.

It accounts for about 12% of total sales. Tesla’s auto business, including service, is roughly seven times as large as energy storage.

That business has had more trouble growing lately. Tesla sold about 721,000 cars in the first half of 2025, down 13% year over year. Wells Fargo analyst Colin Langan wrote Tuesday that third-quarter sales were “trending below consensus.”

Wall Street expects Tesla to deliver about 430,000 cars in the third quarter, down about 7% year over year. That might be a stretch, says Langan, who points out that regional sales data, which gives a partial picture of total sales, have started out the quarter relatively weak, with double-digit declines in some regions, such as Europe.

Langan rates shares at Sell. His price target is $120, one of the lowest on Wall Street.

Dorsheimer rates shares Hold and doesn’t have a price target for Tesla stock. He is getting more bullish, though. “We are finding it increasingly difficult to maintain a Market Perform rating, especially with the positive momentum in the energy business and robotaxi,” wrote the analyst. “We are waiting to see how margins react to the elimination of environmental tax credit revenue in the second half of this year.”

Overall, 43% of analysts covering Tesla stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target is about $314.

Tesla’s non-automotive businesses trumped the company’s car trouble in Wednesday trading. Shares rose 0.2% to $347.70, while the S&P 500 rose 0.3% and the Dow Jones Industrial Average fell 0.5%.

Coming into Wednesday trading, Tesla stock was down about 14% this year, but up about 53% over the past 12 months.

Write to Al Root at allen.root@dowjones.com