Dive Brief:

• Tesla deployed a record 759 MWh of battery storage, while solar installations doubled thanks to the company's decreased installation cost and online order form, company executives said during Wednesday's Q3 earnings call.

• Demand has exceeded supply for Tesla's utility-scale Megapack battery product, according to RJ Johnson, the company's head of commercial energy.

• Limited battery cell production has curtailed production of multiple Tesla products, according to CEO and product architect Elon Musk, who spoke of the need to increase efficiencies and decrease costs.

Dive Insight:

Tesla executives expect to see rapid growth in the company's solar and energy storage divisions in the years to come after what Musk described as the best quarter in Tesla's history.

Energy storage deployments increased 81% from the second to third quarters of 2020, according to the company's Q3 2020 update, setting a new record for the company. Solar deployment also doubled, with 57 MW installed during Q3 after installations slowed in the first and second quarters of this year.

Overall the company's financial health continues to improve, according to Chief Financial Officer Zach Kirkhorn, enjoying its fifth sequential quarter of profitability and double-digit operating margins. Musk said the company anticipates additional growth in 2021 as Tesla's manufacturing capacity expands, mitigating some of the disruptions caused by COVID-19 this year.

Johnson expressed particular optimism for the Megapack, for which he said the company has more demand than supply.

"We continue to ramp the product to meet unprecedented demand," he said. "Our order book is filling up for 2023."

Limited supply of battery cells has curtailed Tesla's progress on multiple fronts, Musk said, repeatedly forcing the company to juggle its own battery production to "take things out of one pocket and put them in another."

"If you just keep doubling things," he quipped, "pretty soon we'll have to start turning Jupiter into cells."

Musk opened the meeting with a pronouncement that manufacturing would become Tesla's long-term competitive advantage, and promising to make battery storage more cost effective by reconsidering the entire technology.

"We want to step back and rethink batteries from scratch, rethinking the fundamental physics," he said. "What's the limit of physics? What's a perfect cell and how quick can we get there?"

With this research and development effort, Musk said, he expects to produce batteries that cost half as much within a few years.

Musk predicted further growth for Tesla's Solar Roof, which he described as a "killer project" with promise to be realized next year. He also hinted at a concept for a residential storage product that would incorporate energy storage and household heating and cooling "in a tight package."

The biggest barrier for the company's solar division, company executives said, was the need to hire and train additional solar installers, and to improve the packaging of components to decrease installation times.