Musk says Tesla ramps Megapack output as 2027 capacity nears sellout

Tesla’s Megapack batteries are almost sold out till 2027 and Elon Musk says that the manufacturer is working to increase their production. There is an upward trend in demand as utility companies and AI data centers look for more stable energy.

“As much as possible”

On October 22, 2026, Musk posted on X:

We are increasing production of Megapacks as much as possible.

He stated that Tesla was nearly running out of its supply for 2027, even before that year had started.

He made the remarks a day after Tesla announced its quarterly financial results. The results showed that the firm has set a record for energy-storage orders and backlog, despite a decline in revenue from the division.

Megapack allows utilities to deal with fluctuations in electricity demand and supply. It acts as battery storage systems that allow utilities to store extra electricity and deliver it to the grid during times of high demand or insufficient renewable energy supply. According to Cryptopolitan, Tesla signed a deal worth $556 million related to energy storage in Shanghai in June 2025 to help the city manage its electricity supply.

Energy revenue slipped even as deployments held

Tesla’s energy sector made $2.881 billion in revenue during the third quarter of 2026, a decrease of 16% compared to last year. However, storage deployments increased by 10% to 13.7 GWh.

Tesla has begun the production of its Megapacks in Texas, which has a listing annual production capacity of 50 GWh. Its California plant has 40 GWh capacity and its Shanghai plant 20 GWh.

Those numbers refer to installed capacity and not batteries produced. Equipment downtime and lack of components can impede production.

Tesla also delivered its first Megapacks using lithium iron phosphate cells from its manufacturing facility in Nevada, which will help the company secure its battery supply domestically.

What’s driving the orders

According to Tesla, storage technology can rapidly provide power to grids. The company coined the term in its October 21 press release as:

“critical to data center uptime.”

Evidence suggests that the necessity is increasing. International Energy Agency (IEA) forecasts that ready-to-use electricity consumed by data centers will rise from 485 TWh in 2025 to 950 TWh in 2030.

The IEA has also reported that in 2025, 108 GW of storage batteries installations worldwide, which is a rise of 40%. The number of solar and wind energy plants leads to an increased demand for energy storage.

Cheaper than gas, but China leads

On October 8, 2026, Wood Mackenzie reported that in the 43 markets that were evaluated, the cost of a four-hour battery was less expensive than that of an open-cycle gas turbine.

This fact serves as an incentive for utilities to invest more. However, it should be noted that Tesla is facing tough competition. According to Wood Mackenzie’s research published on June 29, 2026, Chinese companies have captured 76% of global shipments of battery storage systems in 2025.

Demand doesn’t guarantee profit

Tesla’s overall Q3 revenue was nearly unchanged at $28.046 billion. GAAP net income attributable to common stockholders fell 43% to $787 million. Operating expenses rose 39% to $4.776 billion, while operating income dropped 56% to $718 million. Higher research spending and weaker regulatory-credit revenue weighed on results.

The orders are there. Tesla’s challenge is building enough Megapacks to meet them while protecting its margins.