Tesla is making a bold move into the United Kingdom's energy market, seeking an electricity supply license to power homes and businesses across England, Scotland, and Wales. This move signifies a major expansion of Tesla's energy ambitions beyond electric vehicles and into the realm of household energy provision. The application, submitted to the energy regulator Ofgem, could allow Tesla to begin supplying electricity as early as next year, potentially shaking up the UK's energy landscape.
Tesla's application to Ofgem was filed last month by Tesla Energy Ventures, the company's Manchester-based energy subsidiary. Andrew Payne, head of Tesla's European energy operations, signed the application. Ofgem's review process can take up to nine months. If approved, Tesla would be able to supply electricity to both domestic and non-domestic premises.
The move aligns with Tesla's broader vision of becoming a multifaceted energy and technology powerhouse. Tesla already operates as an electricity supplier in Texas, where it offers competitive charging rates for Tesla vehicles and a "Virtual Power Plant" (VPP) program. This program pays Powerwall owners for feeding stored electricity back to the grid during peak demand, helping to stabilize renewable energy supply. Tesla Electric is expected to be the name of the GB retail business, mirroring its Texas operation. The company had previously revealed its intentions to sell electricity to homes two years ago through a job listing seeking a head of operations. Tesla also holds an electricity generation license since 2020 and has been active in wholesale power trading via its large battery installations and Autobidder software.
Tesla's entry into the UK market could disrupt traditional electricity providers. The company envisions a model where homes generate, store, and even sell excess electricity back to the grid, reducing overall energy costs. Tesla's existing infrastructure in the UK, including over 250,000 electric vehicles and tens of thousands of Powerwall installations, could provide a strong foundation for its energy supply business. Tesla is likely to target owners of its electric vehicles and Powerwall home batteries. Tesla could integrate solar panels, Powerwall battery storage, and EV charging into a seamless ecosystem for households.
However, Tesla faces several challenges. Tesla's UK registrations fell last month, dropping by nearly 60%. The company also dropped by more than 55% in Germany, as well as 45% across 10 European markets. The electric vehicle market is becoming increasingly competitive. Public controversies involving Elon Musk have also impacted brand perception among some UK buyers. Tesla has not applied for a gas supply licence, meaning households on dual-fuel contracts would need to source gas from other providers.
