A wager Elon Musk placed with an Australian tech mogul years ago is now generating billions for him, despite a significant decline in Tesla's sales in that country.
Elon Musk's electric vehicle company, Tesla, generated over $5 billion in revenue in Australia last year, driven by a significant recovery in its battery division, despite declining global vehicle sales. According to its report for the 2024 calendar year submitted to the Australian Securities and Exchange Commission (ASIC), Tesla Motors Australia's revenue increased by one-third, rising from $3.81 billion in 2023 to $5.1 billion within a year. Additionally, profits grew from $39 million to $65 million.
The profit was primarily driven by the sale, installation, and operation of its batteries—both for grid and household use—rather than from its vehicles. Revenue surged nearly five times, increasing from $580 million to $2.55 billion between 2023 and 2024, which Renew Economy referred to as a “remarkable turnaround” for Tesla’s battery storage division.
The profit was mainly fueled by the sale, installation, and operation of batteries for both grid and residential use, rather than from vehicle sales. Revenue skyrocketed nearly fivefold, rising from $580 million to $2.55 billion between 2023 and 2024, a change that Renew Economy described as a “remarkable turnaround” for Tesla’s battery storage division.
Ten years ago, Mr. Musk informed the Atlassian founder that Tesla would set up a 100-megawatt per hour storage facility—the largest lithium battery in the world—in South Australia within a hundred days. Tesla fulfilled this commitment, leading Mr. Cannon-Brookes to admit he had "never been happier to lose a bet." Last year, Tesla attempted to find a buyer for the South Australian virtual power plant, but this has not yet happened.
Tesla Sales Decline
Australia's leading electric vehicle brand reported 1,592 sales in February, more than doubling the disappointing 739 deliveries recorded in January. However, this figure is still significantly lower than the 5,665 sales achieved in February 2024, marking a decline of over 70 percent. The company finds itself in a challenging position, facing weak demand for electric vehicles and growing backlash against Mr. Musk due to his political involvement.
Alongside his vocal backing of Donald Trump and the substantial financial support he provided to the President's campaign last year, Mr. Musk has emerged as a fervent supporter of right-wing parties worldwide. For instance, he openly endorsed Germany's AfD prior to the country's latest election, dismissing worries about its links to neo-Nazi groups. In reaction to his political stance, vandals have targeted Tesla vehicles internationally, leading some owners to either disguise their cars as different models or sell them entirely.
Late last year, Tesla invited bids for its $800 million virtual power plant project in South Australia. Initially announced in 2018 by then-Premier Jay Weatherill, this facility was celebrated as the largest of its kind globally and the first of its kind in Australia. The goal was to provide 250 megawatts (MW) of output to 50,000 households, all connected to the virtual power plant (VPP) within four years.
The energy was intended to be generated using a mix of free solar batteries and Tesla Powerwall 2 home storage batteries. According to a report by The Australian Financial Review, the sales presentation to potential buyers in November indicated that the project aims to install 7,000 Tesla Powerwall battery systems, with a total capacity of 35 MW, by the end of 2024.
According to the pitch, the SA Housing Trust and various Community Housing Providers have entered into a long-term master license agreement for the VPP. Potential investors were told that Tesla's VPP, which it asserts is larger than the $7.8 billion AGL Energy VPP also located in South Australia, boasts a five-year operational history, as reported by the AFR.
The VPP is provided, installed, and maintained by a trillion-dollar company, utilizing its Autobidder software to help households with rooftop solar panels trade their surplus or deficit with the grid. This initiative aims to reduce energy costs and promote renewable energy generation. According to sources, Tesla has "demonstrated the model and is now prepared to transfer ownership, while continuing to install and manage the batteries for the new owner."
Musk's Political Intervention Backfires
Earlier, we discussed Mr. Musk's involvement in German politics, which has had a detrimental impact on Tesla's sales in the country, according to recent data. Last month, Tesla's sales plummeted, despite a significant increase in overall electric vehicle sales. The KBA federal transport authority reported that only 885 Tesla electric vehicles were registered in April, marking a 45.9 percent decline compared to the same month last year.
That number was only about half of what BYD, a Chinese competitor, achieved. Meanwhile, overall electric vehicle registrations increased by 53.5 percent year-on-year, now representing nearly 19 percent of the market. Mr. Musk has encountered significant backlash in Germany for his support of the far-right AfD prior to February’s election. He appeared via video link at a rally and shared a conversation with the party's co-leader, Alice Weidel, on Twitter. Other political parties in Germany distance themselves from the AfD, and last week, the country’s domestic intelligence agency designated it as a right-wing extremist organization.
Some Tesla drivers in Germany have placed stickers on their vehicles that read, “I bought this before Elon went crazy.” The backlash has escalated in more aggressive ways as well. Tesla cars have been the focus of suspected arson attacks in Berlin and Dresden, and protesters have organized demonstrations against the company.
In the three months leading up to April, Tesla registrations plummeted by an astonishing 60.4% compared to the same period last year. Last week, Tesla chairman Robyn Denholm refuted claims that the company's board was considering replacing Musk as CEO.
