Tesla has secured one of Europe’s largest-ever battery energy storage system (BESS) procurement contracts, signing a multi-year agreement with European energy developer NatPower to deliver over 25GWh of Megapack storage projects across Italy and the United Kingdom.
Under the comprehensive long-term partnership, Tesla will provide full vertical solutions including Megapack hardware, end-to-end engineering, procurement and construction (EPC) services, and bankable trading optimisation via its mature Autobidder platform, backed by long-term revenue warranties. NatPower will retain full ownership and operational control of all project assets.
The collaboration kicks off with five initial BESS projects in the two key European markets, marking the first phase of an expansive programme targeting a total storage capacity of more than 100GWh. The full-scale development is estimated to carry a construction value of US$4–5 billion, with projected total revenues exceeding US$15 billion across a 20-year operational lifespan.
The partnership pioneers a unified cross-border framework that synchronises BESS procurement, financing and project execution across multiple jurisdictions. It directly links Tesla’s manufacturing capacity allocation to on-site project delivery, overhauling the fragmented, opportunistic and localised approach that has long dominated large-scale European energy storage deployment.
Fabrizio Zago, CEO of NatPower, highlighted the deal’s ability to resolve a core structural bottleneck facing the energy storage sector. “The industry has abundant access to advanced technology and capital, but consistently fails to deliver infrastructure on time and at scale. The ecosystem we have built with Tesla aligns capital resources with reliable project execution, delivering a replicable model for global markets,” Zago commented.
Mike Snyder, Tesla’s Vice President of Energy and Charging, emphasised the strengths of the company’s integrated strategy. “Tesla’s vertically integrated offering — covering hardware, intelligent software, construction, trading optimisation and lifelong operational services — accelerates project commissioning and ensures stable, full-lifecycle operation for grid-scale storage assets,” Snyder said.
The tailored agreement addresses five critical operational challenges simultaneously: manufacturing capacity reservation, grid connection access, regulatory permitting compliance, financial structuring, and precise execution scheduling, laying a solid foundation for efficient cross-border project delivery.
Representing a major volume commitment for Tesla’s energy division, the 25GWh initial phase accounts for approximately 62.5% of the annual 40GWh production capacity of Tesla’s Lathrop Megapack factory in California. The landmark order justifies Tesla’s ongoing expansion of Megapack manufacturing capacity and provides a long-term contracted revenue pipeline, easing investor concerns over the near-term revenue visibility of its energy business.
Tesla’s energy storage segment faced fluctuating quarterly performance recently, with a 15% quarter-on-quarter drop in deployments and a 12% year-on-year revenue decline from Q1 2025 to Q1 2026, after record growth in 2025. Fierce competition from Chinese manufacturers is expected to compress industry margins in 2026. The NatPower deal reinforces Tesla’s strategic shift toward high-margin, integrated service packages, moving beyond pure hardware price competition.
Italy and the UK are Europe’s most dynamic grid-scale storage markets. Italy’s booming standalone BESS development is driven by capacity market incentives and the need to mitigate solar power curtailment, while the UK’s Capacity Market and Balancing Mechanism create diversified revenue streams to support large-scale project financing. Although falling battery costs and optimised grid connection processes boost market development, lengthy permitting and connection procedures remain key constraints.
Tesla’s Autobidder platform, already operational across European Megapack facilities, delivers proven real-world optimisation capabilities for NatPower’s assets. Tesla, alongside Sungrow, holds top-tier bankability ratings among global BESS suppliers, with leading confidence scores in technological reliability and financial stability, supporting the large-scale cross-border project financing.
Founded in 2022, privately-held energy developer NatPower has rapidly expanded its European storage footprint. The firm previously planned a 1GW/8GWh UK BESS project with Singapore’s Sembcorp, involving £1 billion in private investment, and submitted planning applications for two 1GW/4GWh gigawatt-scale storage projects in the UK in early 2025.
