Tesla Wants to Build a Battery for Your House

Telsa CEO Elon Musk Unveils New Vehicle

Elon Musk, CEO of Tesla, unveils the dual engine chassis of the new Tesla 'D' model at the Hawthorne Airport on Oct. 9, 2014.

Photographer: Kevork Djansezian/Getty Images

Tesla Motors Inc., best known for making the all-electric Model S sedan, is using its lithium-ion battery technology to position itself as a frontrunner in the emerging energy-storage market that supplements and may ultimately threaten the traditional electric grid.

“We are going to unveil the Tesla home battery, the consumer battery that would be for use in people’s houses or businesses fairly soon,” Chief Executive Officer Elon Musk said during an earnings conference call with analysts Wednesday.

Combining solar panels with large, efficient batteries could allow some homeowners to avoid buying electricity from utilities. Morgan Stanley said last year that Tesla’s energy-storage product could be “disruptive” in the U.S. and in Europe as customers seek to avoid utility fees by going “off-grid.” Musk said the product unveiling would occur within the next month or two.

“We have the design done, and it should start going into production in about six months or so,” Musk said. “It’s really great.”

Tesla already offers residential energy-storage units to select customers through SolarCity Corp., the solar-power company that lists Musk as its chairman and biggest shareholder. Tesla’s Fremont, California, factory is also making larger stationary storage systems for businesses and utility clients. The Palo Alto, California-based automaker has installed a storage unit at its Tejon Ranch Supercharger station off Interstate 5 in Southern California and has several other commercial installations in the field.

Utility Clients

But the even larger market may be utility clients.

“A lot of utilities are working in this space and we are talking to almost all of them,” Chief Technology Officer JB Straubel said on the earnings call Wednesday. “This is a business that is gaining an increasing amount of our attention.”

California sees energy storage as a critical tool to better manage the electric grid, integrate a growing amount of solar and wind power, and reduce greenhouse gas emissions. Utilities like PG&E Corp. are now required to procure about 1.3 gigawatts of energy storage by 2020, enough to supply roughly 1 million homes.