Tesla Energy's order book: $10.7 billion in contracted revenue and $3.3 billion paid upfront

Tesla's energy storage business had an odd third quarter. Deployments rose 10% to 13.7 GWh, yet revenue fell 16% to $2.88 billion, partly because Tesla passed part of a tariff refund on to Megapack customers. To see where the business is heading, it helps to look past the quarter's revenue and at the order book. Tesla's quarterly report to the SEC gives two useful numbers.

Number 1: $10.73 billion still to be delivered

Companies have to disclose their remaining performance obligations: revenue from signed contracts that has not yet been earned. For Tesla's energy generation and storage segment, the 10-Q shows:

• Total: $10.73 billion at September 30, 2026, up from $10.05 billion at June 30.
• Next 12 months: Tesla expects to recognise $4.80 billion of that within a year, up from $4.56 billion three months earlier. The rest comes later.

There is an important limit to this figure. It only covers contracts with an original expected length of more than one year. Shorter contracts are left out, so the real order book is larger than $10.73 billion. Tesla also warns that changes in government incentives or tariffs may affect the price of these contracts or its ability to carry them out.

Number 2: customers are paying earlier

The second number is even more telling. Tesla records non-refundable customer prepayments for energy products as deferred revenue. That balance reached $3.30 billion at September 30, compared with $2.31 billion at the end of June and $2.04 billion at the end of 2025.

That is an increase of almost $1 billion in a single quarter. Tesla says the balance is mainly the result of contractual payment terms. In practice, customers who pay large sums upfront are usually securing a place in the production queue, which fits with reports that Megapack supply is nearly sold out for 2027.

How it fits with Tesla's own comments

In its shareholder letter, Tesla said its energy storage business had its highest-ever order rate and backlog, according to Electrek. The company also said its Megafactory in Texas has started production, with 50 GWh of planned annual capacity. At the same time, Tesla says battery cell supply is limiting how many cars it can build, which means storage and vehicles are competing for the same resource.

For perspective: in the first nine months of 2026, Tesla's energy segment generated $8.43 billion in revenue. The $4.80 billion expected in the next 12 months from long-term contracts alone covers a large share of a year's revenue at that pace, before any new orders or short contracts are added. That is our own comparison.

Why it matters

Energy has become one of Tesla's most profitable businesses. In the third quarter, the segment's cost of revenue was $1.93 billion, leaving a gross profit of about $954 million on $2.88 billion of revenue. That margin was flattered by a one-off tariff refund, but even without it the business earns more per dollar of sales than the car business.

A growing contracted backlog and rising prepayments make that revenue more predictable. They also give Tesla cash before it delivers, which helps fund the heavy spending on factories and AI.

What to watch next

• Fourth-quarter storage deployments, which Tesla usually reports in early January.
• Whether the Texas Megafactory ramp lifts deployments above the 13.7 GWh of the third quarter.
• Megapack pricing, which fell this year and weighed on revenue.
• Any changes in tariffs or US incentives that could affect contract values.

This article is for information only and is not financial advice.