EVE Energy Becomes Tesla's 6th Battery Supplier — Will Supply Storage Cells from 2026

2025-08-19 | Calvin

We have learned exclusively that Tesla has reached an agreement with EVE Energy to supply energy storage batteries. EVE Energy’s Malaysia plant is slated to begin supplying storage batteries to Tesla in the United States in 2026.

When asked to confirm the report, EVE Energy responded: “Company business is subject to the company’s official announcements.”

This year, Tesla has been increasing the number of its suppliers to gain greater pricing power over batteries.

Until earlier this year, CATL was the sole supplier to Tesla’s U.S. energy storage facilities. On Tesla’s Q1 earnings call, Elon Musk said the battery industry faced oversupply and that Tesla would consider bringing in more battery suppliers to lower procurement costs.

EVE Energy is the sixth battery supplier Tesla has added. Previously, Tesla had supply agreements with Panasonic, LG Energy Solution, CATL, BYD and Sunwoda. EVE Energy is also the third company to supply energy storage batteries to Tesla’s U.S. operations; the other two are CATL and BYD.

An industry insider said that even after Tesla expanded its supplier base, CATL remains the largest supplier for Tesla’s energy storage business.

Tesla’s energy storage business model is to buy battery cells from suppliers and assemble them into complete storage systems — for example, the large-scale Megapack for office buildings and factories, and the Powerwall for homes. The Megapack accounts for roughly 80% of the revenue in that business.

In May this year, the White House announced plans to raise tariffs on energy storage batteries exported from China from 7.5% to 25% starting in 2026. At present, there are no clear U.S. regulations imposing tariffs on storage batteries manufactured in Malaysia.

For example, if Tesla imports 1 GWh of energy storage batteries — worth roughly RMB 500 million at market prices — from China, it would face an additional RMB 125 million in tariffs.

Tesla’s U.S. energy storage factory requires about 40 GWh of batteries annually, making it one of the largest overseas storage orders. Demand for Tesla’s storage batteries continues to grow. An industry source said LG Energy Solution is also competing to win part of that business.

At the same time, all battery companies — whether already in Tesla’s supply chain or not — must also compete with Tesla’s own battery division.

Earlier this year, Tesla purchased a lithium iron phosphate (LFP) cell production line from CATL and built an LFP energy storage battery factory in Reno, Nevada, beginning in-house production of LFP cells for storage use.

Energy storage is currently Tesla’s fastest-growing and most profitable business. According to the Q3 financial report, Tesla’s storage business grew 52.4% year-over-year, and its storage gross margin reached 30.5% — roughly 10 percentage points higher than the automotive gross margin (19.8%).

On the Q3 earnings call last year, Musk said that over the long term Tesla’s energy business would be larger than its automotive business.

Tesla’s storage business could potentially double next year. Tesla’s Shanghai energy storage factory is nearly complete and is expected to begin mass production in Q1 next year. The plant will produce more than 10,000 storage systems per year and will require about 40 GWh of batteries annually.

The Shanghai plant’s main battery suppliers are CATL and BYD.