Tesla's (TSLA - Get Report) acquisition of Solar City appears to have masked a decline in the company's power storage business, the company's latest 10-Q filing shows.

Tesla reported that energy generation and storage revenue rose $191.2 million, or 841% in the quarter ended March 31, compared with the same period a year earlier.

Tesla's stock closed up 0.53% Friday, May 12, to $342.81 per share. 

However, "this was primarily due to the inclusion of revenue from SolarCity, which we acquired on November 21, 2016, of $208.7 million, partially offset by a decrease in energy storage revenue of $17.4 million," the company said in its filing.

That's a far less rosy situation than was forecast by CEO Elon Musk in August 2015, on the company's second-quarter earnings call shortly after Tesla introduced its Powerwall and Powerpack products for residential and commercial customers.

Back then Musk said, "the demand has been really crazy, so it's well in excess of -- I mean if you just take the reservations that have been made thus far, it's well over $1 billion worth of Powerpacks and Powerwalls."

Musk went on to say "So we're looking at maybe, again, just to preface with meaningful uncertainty, $40 million to $45 million in stationary storage in Q4 and maybe as much as ten times that number in for next year. So it's $40 million to $50 million that this year and 10x of that next year. And I mean that growth rate is probably going to just, keep going at quite a nutty level. It's probably at least a few billion dollars in 2017, somewhat speculative at this point, but I think that's likely."

Tesla remained upbeat about its storage business in its latest SEC filing, but noted it plans to reduce customer acquisition costs "by cutting advertising spend, ceasing door-to-door sales and increasingly selling solar products in Tesla stores." The company said it's "working towards fully staffing more than 70 Tesla stores worldwide with dedicated energy product sales personnel over the next two quarters."

The company does "expect operating expenses to increase as a result of the increased selling, general and administrative expenses incurred by our energy generation and storage segment," Tesla said in its filing.

This story has been updated from May 10 to include Tesla's closing stock price May 12.

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