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Tesla energy revenue drops 16% as it refunds customers over tariffs
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Tesla’s energy generation and storage revenue fell 16% year over year to $2.88 billion in the third quarter of 2026, even as storage deployments rose 10% to 13.7 GWh. Tesla blamed the decline “partially” on “tariff-related customer refunds.” It did not disclose the refund amount or affected customers.
The quarter was volatile for a segment once seen as Tesla’s steadier business. Energy gross margin rebounded to 33.1% from 20.4% in Q2, but gross profit fell to $954 million from $1.07 billion a year earlier. Tesla cited lower energy gross profit among reasons operating income dropped 56%.
Year-to-date, Tesla deployed 36 GWh, up 11% from 32.5 GWh in 2025’s same period, while energy revenue fell 6% to $8.43 billion. Third-quarter deployments also missed analysts’ roughly 15.9 GWh estimate. Tariffs have moved the segment’s numbers repeatedly this year.
In Q1, Tesla listed “energy one-time benefits related to tariffs” among profit drivers and reported a 39.5% energy gross margin without quantifying the benefit. The latest refunds suggest the flow reversed, though Tesla left investors to infer the cause. The company said nothing about who received refunds or why they reduced revenue.
Tesla is also trying to remove tariffs from its supply chain. Megafactory Texas began production with 50 GWh of planned capacity, alongside 40 GWh in California and 20 GWh in Shanghai. Tesla shipped its first Megapacks built entirely with its own LFP cells from Nevada, where it has 7 GWh of early-stage cell capacity.
Tesla said storage demand is at its “highest-ever order rate and backlog,” driven by data centers needing power faster than the grid can deliver. xAI, now part of SpaceX, bought another $269 million of Megapacks this year after $430 million in 2025. The results show energy growth remains uneven, with deployments rising while revenue and profit face tariff-related adjustments.
