Morgan Stanley: data centers outbuy utilities on batteries in 2030; Tesla's energy backlog is $10.7 billion
Morgan Stanley now expects data centers to buy more batteries in 2030 than utilities do, against a power shortfall above 80 gigawatts by 2029. Tesla is the obvious seller, and its storage line is the one part of the AI story already earning the money.
Richard Tang · 3 min read
Data centers have stopped waiting for the grid and started buying their own batteries, and Tesla−3.09% — Tesla, down 3.09 percent today is the seller getting paid. On Morgan Stanley's+3.71% — Morgan Stanley, up 3.71 percent today podcast on Tuesday, the firm's power analyst David Arcaro raised its estimate of the data-center power shortfall to more than 80 gigawatts by 2029, and said data centers' battery demand in 2030 should exceed what utilities themselves install that year 1. Batteries are where AI's money moved this week.
The grid cannot follow a data center's power swings
Data centers ramp their power up and down almost instantly, faster than generation and wires can follow 1. A yard of Megapacks, Tesla's container-sized grid batteries, generates nothing; it buffers, absorbing spikes so a site can take a firmer, cheaper connection and keep building while it waits for the substation. Follow that incentive and the richest customers in the economy stop queueing for grid capacity and self-supply.
The backlog is contracted; the realized price is not
Tesla's quarterly filing shows $10.7 billion of energy contracts still to be delivered at September 30, with $4.8 billion of that landing as revenue within a year 2. Elon Musk says 2027 Megapack output is nearly sold out 1. In 2025, energy earned $12.8 billion at a 29.8% gross margin 1. Cars made 16.2% 1.
That margin produced 22% of Tesla's gross profit on 14% of its revenue 1. The risk sits in pricing: tariff refunds and a warranty charge swung energy's gross margin between 20.4% and 39.5% across 2026's quarters, and third-quarter energy revenue fell 16% on refunds even as deployments rose 10% 13.
Ford arrives in 2027 with idle battery plants
Ford+2.74% — Ford, up 2.74 percent today converted the Kentucky plant it built for EV batteries into Ford Energy in May, assembling lithium-iron-phosphate containers there with first deliveries late in 2027 4. Its target is 20 gigawatt-hours a year 1. Cells are already the contested input: Tesla says battery availability limited its own car volumes last quarter 3. More automakers aiming storage at the same data centers puts pressure on Megapack pricing from 2027 3.
Ford's annual target is still below Tesla's 2025 shipments
Tesla already ships more storage than Ford plans to build
- Estimate
Data
| Value | |
|---|---|
| Tesla, deployed in 2025 | 46.7 GWh |
| Tesla, planned annual capacity (estimate) | 50 GWh |
| Ford, annual target from 2027 (estimate) | 20 GWh |
Wednesday's rout spared the battery seller
Democrats swept both chambers of Congress on Tuesday 5. Wednesday's selloff landed hardest on the companies paid to build the grid, in what Barron's called a postelection AI backlash: contractor Quanta Services−11.90% — Quanta Services, down 11.90 percent today fell 12.4% and turbine maker GE Vernova−9.63% — GE Vernova, down 9.63 percent today 10.3%, while Tesla slipped 1.8% 6. The repricing fell on the route that needs policy to cooperate. A battery yard behind the fence needs only a customer with a power problem.
Wednesday's selloff hit the grid builders; Tesla slipped 1.8%
Data
| Value | |
|---|---|
| Quanta Services | -12.4% |
| GE Vernova | -10.3% |
| Tesla | -1.8% |
The robots still carry the share price
None of this rescues Tesla's earnings yet. Operating margin fell to 2.6% in the third quarter while research spending, aimed at what Tesla now calls Super Intelligence, Optimus and the Cybercab, rose 69% 3.
Tesla's operating margin has slid from 10.8% to 2.6% in two years
Operating profit has nearly vanished under AI and Optimus spending
Data
| Operating margin | |
|---|---|
| Q4 '23 | 8.2% |
| Q1 '24 | 5.5% |
| Q2 '24 | 6.3% |
| Q3 '24 | 10.8% |
| Q4 '24 | 6.2% |
| Q1 '25 | 2.1% |
| Q2 '25 | 4.1% |
| Q3 '25 | 5.8% |
| Q4 '25 | 5.7% |
| Q1 '26 | 4.2% |
| Q2 '26 | 1.4% |
| Q3 '26 | 2.6% |
The stock trades at 189 times forward earnings, and the consensus profit estimate for 2028 still sits below what Tesla earned in 2022 1. January's fourth-quarter deployment report is the dated test, against management's promise that 2026 beats 2025's record 46.7 gigawatt-hours 1. Storage is the part of Tesla that has already shipped revenue, backlog and margin. The rest of the share price still has to ship something.
Get Power by email, free
How AI's hunger for electricity moves utilities, power plants and the grid. In our daily email, every weekday.
