Hey everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads, the Shape, SpaceX, Tesla X, The
Boring Company, and Neurolink. I'm your host, Will Walden.
Hello, hello, hello, everyone. Thank you all for being here.
It's great to see a lot of familiar faces out there.
For those joining us online, we're here in the Boring Company
Tunnel for our latest product unveil and right on brand of
this, this event is powered by Megapacks and Cyber truck.
All right, let's get started. At Tesla, we are building a
world filled with sustainable abundance powered by sustainable
energy. And tonight we are launching the
next chapter in that vision. We are an engineering centric
and engineering LED company and we believe that electric
vehicles, charging, storage and solar and autonomy, they are not
separate tools, but they are one of they are part of 1 seamless
solution set. We are leveraging our
manufacturing expertise. We are leveraging our
manufacturing expertise to produce products affordably and
at scale, increasing the reliability, increasing the
reliability of clean energy and transportation in our
communities. Tesla offers hardware, software,
controls and service all under one roof.
We have engineers across the full spectrum of product
development, energy projects and manufacturing.
It's really what allows us to innovate and iterate quickly to
produce the best products in the world.
Now in 2023, we introduced Master Plan Part 3 and we
outlined how the entire Earth could be run off sustainable
energies using technologies we have today.
In order to eliminate fuels, we need eliminate fossil fuels.
We need to power the grid within renewables, but to do that, that
requires massive batteries. In order to achieve a fully
sustainable economy, we calculated that the world needed
46 terawatt hours or 46,000 GW hours of storage.
Now we know, we know not all of that is going to be a mega pack,
but we are excited to continue being a leader in the space and
transforming the grid to a sustainable future.
But this transformation is not just about renewables.
Global electricity demand is projected to increase by 3%
annually, driven by electrification, manufacturing,
and data centers. AI data centers alone is
projected to make up to 10% of the US energy demand by 20-30.
This rate of load growth hasn't been seen in the US since the
early 2000s. Load is rapidly growing and to
be honest, the grid is not growing fast enough to keep up.
What's interesting to note is that the grid is traditionally
built to handle the highest demand moments, but for most of
the day or even most of the year, it is far below capacity.
It operates far below capacity. Some estimates state that the
grid is about 50% utilized here in the US and said another way,
50% of the grid infrastructure sits idle and unused most of the
year. Batteries are are an ideal
solution to help the grid utilize more of its own supply.
Let's just look at this example. So it's this is an example load
over the course of seven days and you can see the grid
capacity in the dash red line and obviously it is greater than
the load which it should be. Now let's add in a new data
center load which just shifts our entire load up with the peak
now exceeding the the grid capacity.
So traditionally this peak wood forest the grid to install more
infrastructure generation transmission substations just to
serve that new peak. It would raise the entire dashed
line, but it's an intuitive conclusion to see that batteries
could support that peak. And in the process, we are
increasing the utilization and the efficiency of our existing
infrastructure. So with the growth of renewables
and the strain on the grid, the need for storage is real and we
are racing to solve these challenges.
Our growth with Megapack over the last several years has been
exponential. We have over 36 GW hours
installed across 60 countries and over 2100 projects.
And we have another 30 GW hours projected to come online soon
with product that we have already shipped.
We've scaled our manufacturing facilities to greater than 80 GW
hours of manufacturing capacity annually, but we recognize we
still have a long ways to go. We're just at the beginning as
the world needs 2.3 terawatt hours annually to support a
sustainable energy economy. We're up for the challenge.
But how do we go faster? I'm glad you asked.
How do we meet this challenge of a growing energy demand and
strained grid infrastructure? We need fully integrated
solutions that consider the entire scope and the lifetime of
these projects. We need solutions that are
secure, scalable, resilient, and that inspire confidence in the
technology. And quite simply, we need to
figure out how to connect into the grid faster.
So when we started developing the latest iteration of
Megapack, we focused on three guiding principles #1 simplicity
and speed. We recognized that complexity
creates risk and it adds delays. In order to simplify and go
faster, we need to figure out how to make it easier further
upstream in the project #2 we needed a flexible platform.
The grids needs and the industry are evolving quickly.
We need a platform that is able to navigate supply chain
complexities, policy changes and evolving technologies.
And #3 we need to continue what we do best and leverage our
vertical integration. We need to enhance the things
that we've done well with Megapack and learn from our past
generations of products and projects that we've built around
the world. So we're excited to introduce
our next generation product, the next iteration of innovation
born from necessity. Yeah.
All right. We're excited to announce Mega
Block, the latest evolution in our industrial storage product
lineup. This isn't just a new container
or a white box with new specs. We focused on this product being
a plug and play platform, hardware, software, services
delivered as one all from Tesla and moving further up the value
stream than we historically have.
Our Mega Block platform is designed for 20 MW hours of
usable AC energy, a 25 year life, 10,000 cycles and with an
industry leading round trip efficiency of 91%.
So what is Mega Block? Let's take a closer look.
Mega Block is a pre engineered medium voltage block that
integrates our next generation Megapack Threes.
We have eliminated the above ground cabling between the
transformer and the Megapacks using a new flexible busbar
assembly. So we've essentially made this
part of the project now plug and play.
Each block connects to a Tesla system controller, which
orchestrates control of the entire site of up to hundreds of
Megapacks. We've combined these hardware
innovations with the same power electronics, site controls,
software and firmware platforms that we've used on previous
Megapack generations to reduce the risk and allow for a
seamless technology transition. And really, with Megapack 3, we
optimize the product for both mass and energy.
It was important to us to be able to fit the maximum amount
of energy per unit mass because mass is really where the system
breaks. We were able to fit 5 MW hours
of AC usable energy into 86,000 LB box 28 foot long enclosure
that can be shipped globally. We manufacture it in one place
to maintain quality and ship a pre assembled product anywhere
in the world. Megapack 3 is optimized for up
to 8 hour applications and it builds on our proven silicon
carbide, Tesla inverters and our Fire Protection system.
The new thermal Bay is drastically simplified.
It uses the Tesla Model Y heat pump essentially on steroids and
has 78% fewer connections, which minimizes failure points.
We've also also introduced a larger battle battery module and
a larger a larger cell leveraging the latest in cell
technology. And I wanted to talk about the
cell and the supply chain a little bit because obviously
that's a, that's a key component in the industry.
Right now. Megapack 3 is using a 2.8 liter
cell. It's Co engineered with Tesla's
cell team and sourced from reliable vendors worldwide.
And now with Tesla Megapack factories in the US and China,
we'll be sourcing cells from the US, Southeast Asia and China,
making Mega Block a flexible platform ready to handle supply
disruptions, policy changes and technology evolution.
For example, we made sure that the platform didn't need to be
overhauled. If we want to introduce a 5
liter cell, we have multiple transformer vendors qualified
and tested to validate performance from the cell level
to the medium voltage level. Megapack 3 will be manufactured
in Houston in late 2026 with a manufacturing capacity of 50 GW
hours per year. Mega Block works even in the
harshest climates, with an industry leading operating range
down to -40°C up to 60°, which means we can operate from the
northern reaches of Alaska and Canada to the hottest parts of
the Atacama Desert in Chile and the Kingdom of Saudi Arabia.
And one of our core principles, again, in designing Mega Pack
Three with simplicity, it's easy to make things more complicated
as you're thinking about evolving a new product line.
And we wanted to avoid that. We wanted to do what we did well
with Megapack 2XL, which was build a product in the factory
that is factory tested, ship it to the field, ready to connect
to the grid with 0 onsite assembly.
So that effect, Megapack 3 can be easily transported using A7
axle trailer with no onsite assembly.
And with a higher energy rating, we have less Megapacks reducing
the costs and we went from up to 24 cable connections between the
Megapack and the transformer down to three simple busbar
connections. Overall, Megabock is installed
with 23% less labor hours, up to 40% lower costs and it's
engineered for site level density.
Now it's it's no secret that the industry has been trending
towards higher and higher energy density containers.
But as we developed this product, we realized there was a
fundamental problem with that approach.
Once you exceed the maximum shipping weight, you introduce
risky and costly transportation permits and trailers or you you
resort to on site assembly, installing batteries in the
field, validating, integrating, commissioning them and not doing
that in a factory setting. And the metric that actually
matters is site level density, which includes the clearances on
the ground needed to install and service your product.
Said simply, it's, it's, it's not about what you can fit on
your site. It's, I'm sorry, it is what you
can fit on the site. It's not about what you can fit
in the box. This is where we put our focus
and our energy, site level, energy density and testing in
the factory. And with that focus, Megapack
delivery is an industry leading site level density.
Commissioning speed. Commissioning speed is key.
It really is what drives value because time is money,
especially to a lot of people in this room.
These large capital projects are tough.
They require hundreds of people working across several
disciplines over the course of months or years.
Things that might go wrong probably will go wrong in that
process and you need a partner that's going to stand by you
through the whole process. With Mega Block we are targeting
to Commission one GW hour in 20 business days, which is the
equivalent of bringing power to 400,000 homes in less than a
month, which is crazy. How are we planning to do that?
Like most things at Tesla, we are ruthlessly attacking every
opportunity to save our customers time.
Simplify the process, remove steps, automate as much as you
can. One example is how we use
simulation. So we like to bring our
customers and sometimes utilities and grid operators
into a room with our engineers, sometimes months before the
Megapacks are even delivered to the site.
And we can take your actual hardware and your software
controls, the actual software that you'll be using on your
site. Simulate the grid at the exact
point in the grid where you will be connecting and run a bunch of
simulations, control scenarios, grid, grid scenarios to see is
this going to work like I thought it would work.
It's essentially a peek into the future to see if the project is
going to work. Our customers love it.
It's a great opportunity to sort out different bugs in the
software and it allows you to have confidence that when the
mega packs are connected to the grid, it is going to work.
Commissioning this fast is a great example of how our
vertical integration, our engineers across the full
spectrum allow us to serve our customers.
So at Tesla, we do more than build the batteries.
With most battery OEMs and integrators, you have to go to
different companies for different parts.
The batteries for one, the inverter from someone else,
service from someone else, maybe site controls again for 1/4
counterpart. And you can imagine piercing all
those things together and being successful can be difficult.
What sets us apart and what we're proud about is our ability
to provide all your needs in one place, to be your partner
through the whole process. We provide hardware, software,
service fully integrated in one package.
And I just wanted to take a moment to talk about how this
full ecosystem has helped our customers.
Autobidder is our autonomous energy trading platform.
It's built all right. It's built by Tesla's machine
learning optimization software engineers.
And in its most basic form, it is buying low and selling high.
But in reality, there is hundreds of decisions that need
to occur in real time in order to maximize profits.
So here's an example leaderboard from ERCOT in Texas of one of
Tesla's projects and it shows us at the top of the leaderboard in
revenue per MW installed. And the reason I wanted to bring
this up is that it's This site is not an exception.
Autobidder launched in 2017 and we have maintained leadership in
every market we operate in by constantly adapting and evolving
our our algorithm. We're excited to launch into
France later this year. We discussed grid forming
software at Investor Day a few years ago, and we talked about
how it's going to be the future of the grid.
And honestly, there's been a ton of momentum over the past couple
years. So what is it exactly?
The analogy is that it contributes to grid stability,
the way a car's shock absorber dampens vibrations and keeps the
ride smooth. And the reality is you can't
have a fully sustainable grid run on run on renewables without
grid forming software. It's what allows us to take the
traditional generation off of the grid.
And I still, I still frequently hear that this technology is not
ready and it's still in the R&D phase.
This is simply not true. Tesla has been deploying grid
forming software since 2016. We have it operating on over 600
projects, 600 projects across 4 GW hours with 10 GW hours coming
online soon. Here you're looking at Plus
Powers, Plus Powers project in Oahu.
This project allowed the island to start the start
decommissioning and start taking the last coal power plant
offline. It represents over 20% of the
island's peak load. And recently and a few times
actually, the battery has been able to stabilize the grid when
one of the generators trips offline.
It's doing that using grid forming software.
So it works. It is the future and we are
excited to see how it stabilizes grids around the world.
All right, Our global service organization, this team is the
best. They're they're, they're the
best team in the world. And we're super proud.
We're super proud of them. And I say that because over this
last year, they, we, we had 99.3% uptime on our projects
around the world. And that is a big fleet to
maintain above 99%. So, yeah, so how how are we
doing this? Again, it's like everything
else, simplify the process, remove steps, automate where you
can. We are using automation to
detect issues and to trigger our field service teams to action
around the world. We have over the air firmware
updates that increase the performance and the security of
the product over the lifetime of the project just like we do with
the vehicles. And we have an entire
engineering team building software and hardware service
tools that are purpose built for Megapack, making every step
quicker and faster and focusing on time.
This year we also launched our certified service provider
program. This enables our customers and
third parties access to all the service tools that our internal
teams have been using for years. This enables our customers like
Southern Company to take advantage to take Megapack
service into their own hands. We are excited to bring our full
software suite and our service platform to Mega Block.
And one day, not too distant future, we can see Optimus being
a field service technician, reducing costs for both us and
for our customers. Mega Block builds on 10 years of
project experience around the world.
It is simple, it's fast to install, it's flexible, and you
get all the integrated service and software that you've come to
love by working with Tesla, because with Tesla, and really
it's been been like this since the beginning of the Megapack
program. The project is really our
product. Global power infrastructure is
under pressure and we need scalable and reliable energy
solutions that can deploy quickly.
Mega Block accelerates the ability to solve these problems.
The people in this room, you guys are the ones changing the
world. You guys are building the
projects. You're developing it over the
course of a long time and investing your money.
We are excited to transform. We are excited and humbled to
transform the grid with you. Together, we can deploy the
terawatt hours needed to power a sustainable future.
And tonight, we're excited to have a prototype of Megapack 3
upstairs. I just want to say thank you to
everyone that has made this trip.
Thank you for supporting us. Thank you for for being partners
and all these large projects and for trusting Tesla with those
projects. Have a great night.
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