Tesla Sinks 5% Despite Signing $5B European Storage Deal

Tesla signed a multi-year deal with NatPower for 25 gigawatt-hours of battery storage across five initial projects in Italy and Britain. Construction costs run $4 billion to $5 billion, Reuters reported. The contract covers a first phase of a program targeting more than 100 GWh.

Tesla shares fell about 6.6% to near $390 intraday anyway, tracking a broad tech selloff led by chip stocks.

The deal uses Tesla's Megapack systems and energy trading software. NatPower CEO Fabrizio Zago said the partnership aligns capital and execution in a way the firms can extend to other markets. The companies put revenue potential at over $15 billion over 20 years, a forward-looking figure, Reuters noted.

The tech tape sold off broadly on chip-sector weakness. Tesla followed the sector lower. A $5 billion signed storage mandate did not interrupt that decline. The deal is a firm construction commitment, not a memorandum of understanding.

Storage is the Tesla business line whose economics improve with AI-driven electricity demand growth. The European Megapack buildout supplies utility-scale capacity to a region adding data center load. NatPower chose Italy and Britain as first markets for what could become a continent-wide program.

Tesla carries an Alpha Score of 35 out of 100, a Mixed label under AlphaScala's proprietary system. The stock traded at $385.17 in the latest data, down 4.91% on the session. AlphaScala's model weights the high valuation against near-term macro headwinds.

The five projects have no disclosed completion timeline. Zago said the partnership model can be applied to additional markets.