Tesla’s Secret Weapon Is a Giant Metal Box

Elon Musk’s vision for the future of Tesla has finally rolled off the assembly line. Last month, a Tesla factory in Texas built the first Cybercab, a driverless electric car with neither a steering wheel nor pedals. With typical bombast, Musk has promised that the Cybercab will cost less than $30,000 by next year, and said that it could perhaps even pay for itself: Owners will conceivably be able to nap at home while the car is out hailing riders and earning them money.

The Cybercab is among the splashiest parts of Tesla’s pivot away from its core business of selling cars (or at least those driven by humans). Musk is dead set on turning Tesla into a company that makes robots and robotaxis. Earlier this year, he killed the Model S—the vehicle that initially made Tesla into an electric-car giant—freeing up factory space to manufacture Optimus, a humanoid robot he says has the potential to be the “biggest product of all time.” The world’s richest man has a lot riding on the success of Tesla’s robots and robotaxis, namely a pay package worth up to $1 trillion.

So far, the transformation has been chaotic. For all the hype surrounding the Cybercab, it’s not clear that Tesla can legally sell a car without a steering wheel. The technology also remains unproven: Tesla operates a fleet of robotaxis in Austin, where they have crashed at roughly eight times the rate of American drivers, according to an analysis of Tesla’s self-reported crash data. Musk has even further to go with his Optimus robots. The program has been dogged by public embarrassments and failures: At a Tesla event in December, an Optimus robot tasked with handing out water to guests lost its balance and dramatically tumbled backwards. Meanwhile, Tesla’s car sales are tumbling as Musk has seemingly lost interest in making human-driven cars. Besides the Cybertruck, which has proved to be a flop, Tesla has not released an entirely new car model since 2020. (Tesla and Musk did not respond to my requests for comment.)

Tesla is undergoing a transformation—just not one oriented around the Cybercab or an army of humanoids that will do the dishes. The product that is poised to define the near future of the company is a metal box the size of a shipping container. It’s the Tesla Megapack, an enormous rechargeable battery that is used by power plants to balance out the energy supply—for example, Megapacks store solar energy created on a sunny day so that it can be used at night. The Megapack has become the cornerstone of Tesla’s booming energy division. Batteries and solar panels are not glamorous compared with robots, but they are “the here and now,” Ben Kallo, a Tesla expert at the investment firm Baird, told me.

Tesla has always been in the energy business. Electric vehicles, in a basic sense, are just batteries on wheels, giving Tesla a head start in developing larger units such as the Megapack, which launched in 2019. Tesla also makes the Powerwall, a four-foot-tall battery that has become popular among homeowners who want to keep their lights on during a blackout without firing up a generator. And because the rest of the electric-car industry now uses Tesla’s charging plug, Musk owns a network of fast and reliable Superchargers that is ready to sell electrons to everyone.

[Read: Tesla is not the next Ford. It’s the next Con Ed.]

Now, though, something bigger is afoot. Tesla’s energy business is surging as America needs more electricity than ever, in large part for the data centers powering the AI boom. Much of this energy is forecasted to come from solar power and batteries, if only because it’s become the cheapest way to quickly add power to the grid. “We need electrons,” Kallo said. “We need power. And batteries are going up everywhere.” New facilities near San Antonio and Houston are using Tesla batteries to store hundreds of megawatts, helping to meet rising demand and to steady a Texas power grid that has seen devastating blackouts during winter storms. Data centers are also installing their own large-scale batteries, including Tesla’s, as a contingency against power outages. Last year, Tesla sold $430 million in Megapacks to xAI, meaning Musk’s own batteries are powering a barrage of Grok requests.

The political winds are blowing Tesla’s way, too. Although the Trump White House has slashed incentives for renewable energy, it has gone easier on batteries. Chinese companies lead the world in battery manufacturing, but they face steep tariffs in the United States—leaving Tesla primed to swoop in with American-made Megapacks. To be clear, Tesla is not making most of its money from batteries. The company’s energy division contributed 23 percent of Tesla’s total profits during the first half of last year, and much of the rest came from cars. But as Tesla’s EV sales slide, Musk may be forced to lean into batteries. Energy can bring in the steady revenue that he needs to pull off Tesla’s pivot to robots and robotaxis. “It’s very important to Tesla from a cash-flow perspective,” Kallo said.

[Read: Tesla wants out of the car business]

Perhaps that also explains why Musk’s passion for solar power has reignited. A decade ago, Tesla bought the solar-panel start-up SolarCity—only to let it gather dust while Musk chased obsessions such as tunnel-boring machines and reusable space rockets. In January, Tesla announced plans to build its own solar panels at a factory in Buffalo, New York, and to make enough solar panels to generate 100 gigawatts of solar energy by 2028. For comparison, that’s more than twice the entire amount of solar power that’s projected to be added to the U.S. power grid this year. Here, the mundane business of making and storing energy gets roped into Musk’s sci-fi dreams: The investment firm Morgan Stanley predicts that Tesla’s plan to create all this energy hinges on the existence of data centers in outer space powered by solar panels that orbit where the sun never sets. That remains an exotic ambition. “Let’s give it a haircut and say they do 25 gigawatts.” Kallo said. “That’s still massive.”

Even as Tesla backs away from selling electric cars, the success of its energy business suggests that the company still has the potential to do enormous good for the planet. In November, the company soft-launched Oasis, the largest Tesla Supercharging station in the world, featuring more than 160 plugs. The pit stop, located at a dusty highway interchange north of Los Angeles, is lined with solar panels to provide the juice and Megapack batteries to store energy for when it’s not sunny. In effect, Tesla has created a zero-emissions charging station that runs off the grid. Similar projects that pair Tesla’s batteries and solar panels could help make sure that the coming armada of AI data centers isn’t powered by dirty energy.

For Musk, though, the crux of all this may not be to save the planet. It’s control. A burgeoning energy business gives Musk more sway over the future of AI. “Energy is a big part of the arms race right now,” Kallo said. Even if the future of AI doesn’t go Musk’s way—if the Cybercab never catches on and his humanoid robots never learn to manipulate objects with the grace of the human hand—he could wind up as AI’s energy baron. That may be a consolation prize, but it’s still one that will make Musk a fortune.