Tesla Powerwall Battery Production Slows Due To Chip Shortage

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Elon Musk admits in court that Tesla cannot produce enough Powerwall batteries because of the ongoing global chip shortage

Tesla CEO Elon Musk made a surprising admission this week during his testimony in a Delaware court about his role in Tesla’s $2.6bn acquisition of SolarCity in 2016.

Musk revealed in court that demand for Tesla Powerwalls stands around 80,000 units, but the company won’t be able to make even half of that many this quarter, CNBC reported.

In the “best case,” Musk said, Tesla will produce 30,000 to 35,000 of its home backup batteries in the current quarter. He blamed the expected shortfall on chip shortages.

Tesla’s Powerwall home power storage battery. Image credit: Tesla

Powerwall shortages

Musk said that Powerwall availability would only happen in three or four months.

Musk was defending his role in Tesla’s 2016 acquisition of SolarCity, the solar installer, for around $2.6 billion.

Shareholders have sued Tesla alleging that Musk pushed for the SolarCity deal, was improperly involved when he should have been fully recused, and acted in his own best interests.

A year before the SolarCity acquisition, Tesla launched its Energy business in 2015 and unveiled a rechargeable battery system (the Powerwall) that could help lessen reliance on the national grid for energy needs.

The ‘offgrid’ idea is that the 13.5 kilowatt-hour (kWh) Powerwall system will store solar energy, that can be used to power a home during the evening and morning, and also safeguard a house against power outages or blackouts by providing a backup electricity supply.

Offgrid power

When it was launched, Telsa pointed out that the typical home tends to use the most power in the morning and evening.

During the day solar energy is plentiful, but when the sun is down or about to rise, homes typically use the bulk of their energy.

This means that houses with solar panels will often sell the power supplier their excess solar energy during the day, but then buy it back in the morning and evening.

Since 2015 Powerwall was available in seven countries worldwide, but in 2019 Tesla expanded its availability to include countries such as Japan.