Tesla secures a $5 billion deal! Partnering with NatPower to deploy battery storage projects in Europe

Zhitong
2026.06.23 08:58

Tesla has reached an agreement with NatPower to build battery storage projects with a total capacity of 25GWh in Italy and the UK. This is the first phase of a plan worth up to $5 billion, utilizing Tesla's Megapack system and power trading technology. The collaboration aims to address the electricity balancing demands brought about by the growth of renewable energy in Europe, with a long-term goal of over 100GWh and expected cumulative revenue exceeding $15 billion, further solidifying Tesla's energy storage business as a performance growth engine

According to Zhitong Finance APP, independent energy company NatPower announced on Tuesday that it has reached an agreement with Tesla (TSLA.US) to build a total of 25 gigawatt-hours (GWh) of battery storage projects in Italy and the UK. This is the first phase of a plan with a total value of up to $5 billion.

As the installed capacity of intermittent renewable energy generation continues to increase, European countries are accelerating the construction of battery storage projects to help balance electricity supply. Under this multi-year agreement, NatPower will use Tesla's Megapack large battery storage system. NatPower will also utilize Tesla's power trading technology, which can manage when to buy and sell electricity.

The two parties stated that five projects will be built initially as the first phase of the overall plan. The ultimate goal of the plan is to achieve over 100 GWh of storage capacity, with expected construction costs ranging from $4 billion to $5 billion. The two companies added that the cumulative revenue from the project over the next 20 years is expected to exceed $15 billion.

NatPower CEO Fabrizio Zago stated, "The industry is not lacking in technology and capital, but it is still difficult to deliver infrastructure projects sustainably and on the required timeline. What we are building with Tesla is an ecosystem that can coordinate capital and execution, and this model can be replicated in multiple markets."

In the current context of pressure on Tesla's automotive business growth, the energy storage business is becoming an important engine for driving Tesla's performance growth. Energy storage is one of the key areas Tesla has invested in in recent years. In the first quarter of this year, Tesla's energy storage business installed capacity was 8.8 GWh, a decrease of 15.38% compared to the same period last year. However, the gross margin for this business in the first quarter was 39.5%, setting a new high. Despite the year-on-year decline in installed capacity in the first quarter, Tesla CFO Vaibhav Taneja stated that the company's total energy storage installed capacity for the full year of 2026 is still expected to be higher than that of 2025. Last year, Tesla's energy storage business installed capacity was 46.7 GWh, a year-on-year increase of 48%.

In the first quarter of this year, Tesla's energy storage business made progress in expanding production. The construction of the company's energy storage gigafactory located in the suburbs of Houston, Texas, is proceeding smoothly, and this factory will produce the third-generation Megapack storage system for Megablock, with mass production expected to start later this year. Additionally, Tesla previously announced plans to establish 100 GW of solar manufacturing capacity in the U.S. by 2028, and reports indicate that Tesla has been negotiating with Chinese suppliers regarding solar production equipment

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