‘Remarkable turnaround’: Elon Musk’s Tesla making billions from bet on Australia
A bet Elon Musk made with an Aussie tech mogul years ago is now earning him billions of dollars, even as Tesla’s sales in this country plummet.
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Elon Musk’s electric car company, Tesla, made more than $5 billion in revenue in Australia last year thanks to a “remarkable turnaround” in its battery division, amid tanking global sales for its vehicles.
Per its report for the 2024 calendar year, filed with the Australian Securities and Exchange Commission (ASIC), Tesla Motors Australia’s revenue jumped by a third ($1.29 billion) from $3.81bn in 2023 to $5.1bn within 12 months, while profits rose from $39 million to $65m.
That profit was in large part due to the sale, installation and operation of its batteries – at both grid and household scale – rather than its cars.
Revenue soared nearly five-fold from $580m to $2.55bn between 2023 and 2024, in what Renew Econcomy described as a “remarkable turnaround” for Tesla’s battery storage arm.
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It also, for the first time, outpaced Tesla’s vehicle sales, which declined from $3.18bn to $2.44bn – a slide that’s continued since December.
The genesis of Tesla’s battery-based profits in Australia lies in a wager Mr Musk had with Aussie tech billionaire Mike Cannon-Brookes years ago.
A decade ago, Mr Musk told the Atlassian founder that Tesla would install a 100-megawatt per hour storage plant, the world’s largest lithium battery, in South Australia within a hundred days.
Tesla delivered on the promise, prompting Mr Cannon-Brookes to concede he had “never been more happy to lose a bet”.
Last year, Tesla sought to find a buyer for the South Australian virtual power plant. That has yet to transpire.
Tesla sales drop
Australia’s best-selling electric vehicle brand recorded 1592 sales in February, which was more than double the disastrous 739 deliveries notched in January. But that number is significantly down on the 5665 sales of February 2024 – representing a reduction of more than 70 per cent.
The manufacturer is in interesting territory, fighting soft demand for electric vehicles and an increasingly hostile response towards Mr Musk, driven by his involvement in politics.
In addition to his vocal support for Donald Trump, and hundreds of millions of dollars in funding for the US President’s campaign last year, Mr Musk has become an enthusiastic advocate for right-wing parties around the world. He openly supported Germany’s AfD, for example, before that country’s most recent election, brushing aside concerns about its association with neo-Nazis.
In response, vandals have targeted Tesla vehicles around the globe, even prompting some owners to disguise their vehicles as other models, or sell them altogether.
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Late last year, Tesla called for bids on its $800 million virtual power plant in South Australia.
Announced in 2018 by then-Premier Jay Weatherill, Tesla and the state government, the factory – which was hailed at the time as the largest of its kind in the world, and an Australian first – aimed to supply 50,000 households with 250 megawatts (MW) of output connected into the virtual power plant (VPP) within four years.
The energy was supposed to come from a combination of free solar batteries and Tesla Powerwall 2 home storage batteries.
The sales pitch in front of potential buyers in November, The Australian Financial Review reported, showed the project expected to have 7000 Tesla Powerwall battery systems totalling 35MW capacity installed by the end of 2024.
The SA Housing Trust and other Community Housing Providers had signed up for the VPP under a long-term master licence agreement, the pitch said.
Potential investors were informed that Tesla’s VPP – which it claims is bigger even than the $7.8 billion AGL Energy VPP also in South Australia – comes with a five-year operational track record, the AFR reported.
The VPP is supplied, installed and serviced by the trillion-dollar company, and relies on its Autobidder software to assist households with rooftop solar to combine then trade their surplus (or deficit) with the grid in an aim to lower energy costs and encourage the generation of renewable energy.
Sources told the publication that Tesla has “proven the model and is now ready to hand over the keys, but would continue to install and manage the batteries for the new owner”.
Musk’s political intervention backfires
We mentioned Mr Musk’s intervention in German politics earlier. It has had a terrible effect on Tesla’s sales in the country, according to the latest data.
Tesla sales in the country nosedived last month, even as electric vehicle sales more generally rose strongly.
Just 885 Tesla electric vehicles were registered in April, 45.9 per cent fewer than the same month last year, the KBA federal transport authority said.
That was barely half as many as BYD, a Chinese competitor, managed.
At the same time, overall electric vehicle registrations rose by 53.5 per cent year-on-year and now account for almost 19 per cent of the market.
Mr Musk has faced particular hostility in Germany for backing the far-right AfD before February’s election, by appearing via video link at a rally and broadcasting a conversation with its co-leader, Alice Weidel, on Twitter.
Other political parties in Germany shun the AfD and Germany’s domestic intelligence agency last week classified it as a right-wing extremist organisation.
Some German Tesla drivers have put “I bought this before Elon went crazy” stickers on their vehicles and the backlash has also taken more forceful forms.
Tesla cars have been targeted in suspected arson attacks in Berlin and Dresden, and protesters have staged demonstrations against the carmaker.
Over the three months to April, Tesla registrations fell a whopping 60.4 per cent from the same period a year ago.
Tesla chairman Robyn Denholm last week denied that the carmaker’s board was looking to replace Musk as CEO.
– with AFP
Originally published as ‘Remarkable turnaround’: Elon Musk’s Tesla making billions from bet on Australia
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