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Tesla's business has shown strong resilience in these challenging times. The company posted a fourth sequential GAAP profit in Q2 2020 while generating a positive free cash flow of $418M. Tesla Energy is one of the highlights of Q2. The company and its CFO, Zachary Kirkhorn, are very optimistic about this segment of the business.
Tesla announced that, despite the fact that Megapack was launched only recently, it continues to develop, and for the first time generated a profit in Q2. Storage deployments increased sequentially to 419 MWh. These figures are due to the growth of both Powerwall and Megapack.
Tesla Energy is committed to helping the world move to sustainable energy sources. This segment of Tesla’s growth picture may be under appreciated, but it is this special focus that has the power to lift Tesla to trillions of dollars of market capitalization. During the Earnings Call Q2 2020, Tesla CEO Elon Musk noted that overall, the energy sector is larger than the automotive sector.
Until now, Tesla Energy has played a backseat to its automotive division, but Tesla is always striving for growth. Social Capital CEO Chamath Palihapitiya told CNBC on Thursday that Tesla's growth is much more than about electric cars.
“What Tesla is going to do with their battery packs and software will all of a sudden allow each of us to be in the energy business, as well,” Palihapitiya said.
“Again, people will get angry, they will not understand, they will try to push back, and they will be wrong. And what’s going to happen is this stock is now going to represent the totality around decarbonization and sustainability, so it was really great to own this thing around cars for the first few years, I get it. But now I underwrite this stock as a push toward decarbonization, towards unregulated energy, and towards the ability for all of us to become our little micro utilities.”
Autobidder is the company's latest product in the energy department. This is a real-time trading and control platform that provides value-based asset management and portfolio optimization, enabling owners and operators to configure operational strategies that maximize revenue according to their business objectives and risk preferences.
In other words, Tesla developed software for independent power producers and utilities and capital partners to help them manage and monetize clean energy stored in battery storage systems. “Autobidder is Autopilot for grid type batteries,” Musk said.
The platform is already being used at the Hornsdale Power Reserve, which uses Tesla Powerpacks. The software can be used with Tesla Megapacks and Powerpacks but is not limited to Tesla products alone. As such, Tesla has developed software that could be useful at the residential and commercial level, making Autobidder a game-changer for the company’s Energy department.
Tesla recently launched Autobidder in Europe and started trading on the European Power Exchange, in addition to exchanges in the U.S. and Australia.