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LAS VEGAS — On Monday night in a subterranean hall under the Las Vegas Convention Center, Tesla released an upgraded version of its grid-battery product that will allow developers to build bigger energy-storage projects faster. That kind of acceleration is sorely needed as the storage industry positions itself to meet historic grid demand in the next few years.
While better known for its pioneering electric-car business, and the polarizing antics of CEO Elon Musk, the company is also a pacesetter in the fast-growing U.S. energy-storage industry.
Tesla’s white boxy Megapack product, which stitches together lithium-ion batteries inside a large container, has been a top competitor for years. Around the U.S., Megapacks play a crucial role in keeping the lights on: In Oahu, they enabled the safe retirement of Hawaii’s last coal plant; in Oxnard, California, they allowed the city to avoid building a gas plant on its coastline; across Texas, they’re helping lower electricity prices and avoid shortfalls during record heat waves, as are batteries from companies like Fluence and Wärtsilä.
But the storage industry is still young, with plenty of room to streamline operations and bring down costs. That’s what Tesla hopes to do with the new Megablock, which packages four Megapacks around one transformer.
One of these blocks holds 20 megawatt-hours of power, which can be discharged for up to four hours at peak capacity. Scaled up for a large project, 248 megawatt-hours can fit into an acre (for comparison, the Oxnard project packed in about 200 megawatt-hours per acre using earlier-generation Megapacks back in 2021).
Tesla is taking orders for Megablocks now and expects to ship starting in late 2026. The firm will manufacture them near Houston, with lithium-iron-phosphate batteries from multiple sources, including a 7-gigawatt-hour-per-year manufacturing line planned to be completed at the company’s Nevada Gigafactory in early 2026.
The timing is no coincidence. Tesla’s new announcement comes as AI computing gobbles up electricity in unfathomable quantities. The rapid construction of new power sources has emerged as a defining imperative for America’s tech industry as it races to achieve what it sees as the transformative benefits of advanced AI. President Donald Trump has claimed that global AI supremacy is a key priority, even as his administration has taken aggressive steps to choke off development of the nation’s fastest-growing sources of energy.
Tesla says the Megablock design will allow developers to deploy 1 gigawatt-hour’s worth of storage in just 20 business days. That’s an astonishing rate, if borne out in real-world conditions. The firm has made bold claims in the past that have failed to materialize on time if at all, like its visions of a widely adopted solar roof or a huge autonomous taxi fleet. But the Megablock doesn’t hinge on a fundamentally new product; it’s another step in the steady evolution of a flagship technology.
The Megablock’s main innovations are that it reduces the amount of electrical work required in the field while also packing in battery cells as densely as possible without going over the weight limit that triggers expensive specialized shipping protocols.
“For us, one of the key metrics was, what’s the maximum percent cell mass you can get?” said Mike Snyder, Tesla’s VP of energy and charging, in an interview after his presentation. “Because the cells are what matters. So we made sure we increased that. It’s an 86,000-pound box, and 75% of that is cell.”
A giant battery installation requires thousands of perfectly executed electrical connections, and mishaps can cause major problems. Megapacks come with their batteries pre-wired, allowing for factory-grade quality controls. But currently, each pack then needs to be connected to a medium-voltage transformer to ship power in and out, which takes up to 24 individual connections per pack.
“That’s just a lot of labor in the field, and it’s a lot of places where something can go wrong,” Snyder said. “One of those bolts, one of those cables, it causes downtime and you have to go fix it.”
The new Megablock, in contrast, needs just three connections per pack.
Tesla timed the unveiling for the opening night of RE+, the bustling solar and clean energy industry conference, but hosted it on Musk-affiliated turf: a station for his side project boring holes under the Las Vegas Convention Center. Attendees were invited to experience the thrill of being chauffeured in a manually driven Tesla through a one-lane tunnel — not necessarily a harbinger of the future of transport, but it was lit by colorful LEDs.
Musk himself was not on hand, but Snyder addressed the crowd from a stage that was also lit by LEDs and flanked by Cybertrucks and Tesla’s new humanoid automatons. The screen behind him lit up with sharply produced drone footage of massive Megapack installations in lush locales.
The spectacle offered an implicit riposte to the Trump Department of Energy, which a few days earlier had tweeted, “Wind and solar energy infrastructure is essentially worthless when it is dark outside, and the wind is not blowing.” The claim reflected either a remarkable ignorance of energy storage, a longtime research and deployment priority of that very same department, or a desire to pretend batteries don’t exist.
Batteries accounted for 23% of new grid-scale capacity built in the U.S. last year, compared to just 4% of new capacity that came from the fossil-gas plants much admired by the Trump administration.
While Tesla’s CEO spent hundreds of millions getting Trump elected and a few months slashing the federal civil service, Tesla’s engineers kept hacking away at the problem of making better batteries.
The attention to detail goes down to the paint job.
If you look at enough photos of grid battery projects, they blur into beige anonymity. But seeing the Megablock up close, the coat of white paint held more allure than it does from afar, more of a pearlescent sheen. A Tesla tour guide told me the shade was selected to maximize reflection of heat from the sun, thus reducing the energy needed to keep the batteries cool. The central chamber of the Megapack features a supercharged version of a Model Y heat pump, borrowed from colleagues on the automotive side of the company to chill liquid cooling streams that keep Megapack batteries and inverters safe.
Also taking in the sight was Tyler Norris, a Duke University doctoral student and leading researcher on how the U.S. might power its data-center boom. He noted that speed to market has become the premium that large energy customers are clamoring for.
“The U.S. is just in a major capacity crunch right now,” Norris said. “We’re going to need all sources of peaking capacity that we can get, and battery storage and the Megapack solutions are a critical option.”
The U.S. is expected to build 18 GW of batteries this year, per federal data, up from 13 GW last year, with California and Texas continuing to lead the way. Trump’s actions have injected deeper uncertainty into the market in 2025, with tariff fluctuations and new anti-China regulations. But the big tax-and-spending law passed by Republicans in July kept energy-storage tax incentives in place for years to come, even as it gutted wind and solar tax credits, meaning the outlook for storage is less muted than it is for the renewables it’s often paired with.
Meanwhile, data centers haven’t yet become big installers of on-site batteries, Norris added, but that could start to happen in the next couple of years. The typical four-hour duration of commercially available batteries today doesn’t lend itself to a round-the-clock power supply, so data-center developers are still figuring out how best to slot batteries into their energy portfolios.
Also viewing the big white box was Jesse Peltan, known for his spirited and data-rich defenses of clean energy on X, the Musk-owned social media platform.
“I think Megapack is the most underrated product that Tesla has by far, and I think Megablock is going to make it easier, cheaper, faster to interconnect Megapacks into the grid,” he said.
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