Renewable energy developer NatPower and Tesla have signed a multi-year supply and operations agreement for more than 25 GWh of battery energy storage systems (BESS) in Italy and the United Kingdom.
Under the agreement, Tesla will provide its Megapack battery storage systems, in addition to engineering, procurement and construction services and affordable trading services through its Autobidder platform, with long-term revenue guarantees. NatPower will own and operate the projects.
The agreement includes five initial projects in the two countries, which represent the first delivery phase of a broader program targeting more than 100 GWh of total storage capacity. The total construction value across the site is estimated at US$4 to US$5 billion (£3.8 billion), with expected sales of more than US$15 billion over 20 years.
NatPower CEO Fabrizio Zago said the deal addresses a structural problem in battery storage deployment that persists despite capital and technology availability.
“The industry has access to technology and capital, but still struggles to deliver infrastructure consistently and within required timelines. What we have built with Tesla is an ecosystem that enables alignment between capital and execution, and can be replicated across multiple markets,” Zago said.
Mike Snyder, VP of energy and charging at Tesla, said the company’s “vertically integrated offering, which delivers hardware, software, engineering, trade optimization and service” is designed to bring projects online faster and ensure they continue to operate for the life of the product.
The agreement is structured to address five operational requirements simultaneously: generation capacity reservation, grid access and connection, permit and regulatory compliance, financial structure and implementation planning.
NatPower describes it as the first time that BESS procurement, financing and execution across multiple jurisdictions will be coordinated under a single integrated framework, directly linking production allocation to project delivery.
The companies positioned this as a step beyond what it describes as an “opportunistic and local approach” that has characterized large-scale storage purchasing to date.
At 25 GWh, the first phase of the NatPower agreement is one of the largest single BESS procurement contracts announced on the European market.
Tesla’s Megapack factory in Lathrop, California, has an annual production capacity of about 40 GWh, meaning the NatPower order represents about 62.5% of that annual production if fulfilled within one year of production.
The deal requires a sustainable production allocation and underlines why Tesla has expanded Megapack’s production capacity.
The deal comes as Tesla’s energy storage business is going through a period of mixed quarterly performance. Tesla registered one 15% decline in quarterly deployments and 12% year-over-year decline in energy division revenues between Q1 2025 and Q1 2026a reversal from 2025’s record deployment figures.
The NatPower agreement provides a visible, long-term pipeline of contracted volume that partially addresses investor concerns about near-term revenue visibility in the energy division.
That performance in 2025 itself followed a period of continued growth. Tesla’s commitment to energy storage will soar by 2025, a year that the company described as pivotal for AI-driven transformation. However, 2026 also saw margin compression as competition in the utility storage market increases and prices come under pressure from Chinese manufacturers.
The NatPower deal, which bundles hardware with software, construction and long-term trading services, is consistent with Tesla’s strategy to move toward higher-margin integrated services rather than competing solely on Megapack’s unit price.
