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Tesla and NatPower have signed a multi-year agreement to build 25 GWh of battery energy storage across five projects in Italy and the United Kingdom. The initial phase carries an estimated construction price tag between $4 billion and $5 billion, making it one of the largest battery storage commitments in European history.
The deal goes well beyond the first 25 GWh. Both companies say this is the opening act of a broader strategy targeting over 100 GWh of total battery capacity. If the revenue projections hold, the partnership is expected to generate upwards of $15 billion over a 20-year horizon.
What the deal actually involves
NatPower will integrate Tesla’s Megapack systems, the company’s large-scale lithium-ion battery product designed for utility-grade energy storage. Think of Megapacks as shipping-container-sized batteries that sit next to power grids and absorb excess electricity when supply is high, then release it when demand spikes.
Beyond the hardware, NatPower will also use Tesla’s advanced energy trading software. The software decides when to buy cheap electricity from the grid and when to sell it back at a premium.
Fabrizio Zago, CEO of NatPower, framed the partnership in terms that go beyond a single market.
“It creates an ecosystem that harmonizes capital investment with operational execution, a framework that can be adapted and replicated in various global markets.”
NatPower, founded in 2019, operates as an independent renewable energy infrastructure company focused on Europe.
Why Europe, why now
Italy and the UK both face specific grid challenges that make them natural candidates for large-scale storage deployment. Italy’s solar generation peaks during midday hours when demand is often lower, creating a mismatch that batteries can bridge. The UK, meanwhile, has invested heavily in offshore wind but needs storage infrastructure to smooth out the variability that comes with North Sea weather patterns.
What this means for investors
The projected $15 billion in revenue over 20 years implies a roughly 3x return on the initial capital expenditure of $4 billion to $5 billion.
For Tesla specifically, this deal reinforces a narrative that the company has been pushing for years: it is not just a car company. A commitment of this magnitude in Europe signals that the Megapack business is scaling beyond its North American stronghold. Each Megapack deployment also creates a recurring software revenue stream through the energy trading platform, which carries significantly higher margins than hardware sales alone.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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