In a bold move that could shake up the British energy market, Elon Musk's electric car and energy company, Tesla, has applied for a license to supply electricity to households and businesses across England, Scotland, and Wales. The application, submitted to the energy watchdog Ofgem, signals Tesla's ambition to expand its business beyond electric vehicles (EVs) and into a new frontier, potentially taking on the big firms that currently dominate the UK's energy sector.
Tesla, which has long been a global leader in EV manufacturing, also operates a significant solar energy and battery storage business. This experience in the energy sector gives the company a unique advantage. In Texas, for instance, Tesla Electric already operates a power supplier that allows owners of its EVs to charge their cars cheaply and even pays them for feeding surplus electricity back to the grid. This model of decentralized energy, which empowers consumers, could be a game-changer for the UK market if replicated.
The application, signed by Andrew Payne, who runs Tesla's European energy operations, was filed late last month. While Ofgem can take up to nine months to process such applications, the potential for Tesla to enter the market as early as next year is a real possibility. With over a quarter of a million EVs and tens of thousands of home storage batteries already sold in the UK, Tesla has access to a sizable customer base, giving it a solid foundation to build an electricity supply business.
The timing of this application is particularly interesting, as it comes amid a challenging period for Tesla's EV sales in Europe. Recent industry data shows a significant decline in UK car registrations of Teslas, with sales falling by almost 60% in July and by more than 55% in Germany. This slump has been attributed to tough competition from rival EV makers, especially China's BYD. The move into the energy market, therefore, could be seen as a strategic diversification of the company's business, aimed at offsetting the recent downturn in its core EV market.
Furthermore, Elon Musk's recent foray into right-wing politics in the UK, Germany, and Italy, along with his public falling out with President Donald Trump, has drawn criticism from some of Tesla's customers. The company's push into the energy sector could be a way to shift the public narrative and focus on its innovative and environmentally friendly business ventures, rather than its CEO's controversial political stances.
