Ofgem has granted Tesla an electricity supply licence across England, Scotland, and Wales. The approval allows Elon Musk’s company to enter Britain’s retail energy market for the first time.
Tesla will replicate its Texas operation, where it trades as ‘Tesla Electric’ and promises customers “low-cost sustainable electricity” for homes, EVs and communities. The licence covers electricity only – Tesla can’t offer dual-fuel contracts but could supply power to customers who source gas separately.
Virtual Power Plant Operations
In Texas, Tesla runs a virtual power plant that lets customers charge their cars during off-peak hours and sell stored energy back to the grid. The system uses Tesla’s Powerwall home batteries, which store electricity from solar panels.
Britain’s Smart Export Guarantee offers similar functionality. SEG pays households up to 30p per kilowatt-hour for unused renewable energy through tariffs like Outgoing Octopus.
Only Octopus Energy and EDF currently offer Tesla Powerwall installations to UK customers. Tesla claims it’s installed over one million Powerwalls worldwide.
Struggling Car Sales
Tesla’s UK vehicle sales dropped 37% last year, falling from 3,852 to 2,422 units. The company’s market share sits at just 1.34% – well behind Chinese competitor BYD at 2.64% and BMW at 5.43%.
Several factors have damaged Tesla’s reputation recently. Accidents involving self-driving taxis and redacted crash reports have raised safety concerns. Musk’s political activities have also drawn criticism.
Tesla’s product lineup has largely stagnated. The company discontinued its Model S and Model X this year to focus resources on its Optimus robot project. The Model 3, despite receiving updates for 2024, launched nearly a decade ago.
The Model Y remains Tesla’s newest vehicle, having debuted in 2022. Musk has repeatedly promised a new Tesla Roadster but hasn’t confirmed any launch timeline.
Tesla launched a cheaper Model 3 variant late last year, but the move hasn’t reversed declining UK sales. The energy licence represents a new revenue stream as the company faces increased competition in its core automotive business.
