Elon Musk's Tesla entering UK energy market could 'lower bills' for households

Elon Musk's Tesla is planning to enter the British energy market in the coming months, and it could spell good news for households.

The company has sought approval for an energy licence from regulator Ofgem to compete with energy supply giants, including British Gas owner Centrica and Octopus Energy. It hopes to start supplying energy to homes and businesses in England, Scotland and Wales as soon as next year. Experts have suggested this could pave the way for more "competitive" pricing and innovation in the British energy market. Scott Byrom, CEO at The Energy Shop told Express.co.uk: "Competition from one of the biggest brands in the world can only be welcomed.

"Tesla is already the largest provider of electric vehicles in the UK and offers one of the best battery storage units on the market. If they can help drive innovation, competition and reduce prices for consumers, then this could be a very interesting move indeed."

The energy expert suggested that Tesla could look to "aggressively compete on price" to grow its market share, which would further drive competition.

Additionally, he said, "They have the added benefit of being able to bundle this with electric vehicles (EVs), as we saw with Octopus Energy and the Chinese car manufacturer BYD."

Beyond EVs, Mr Bryom said: "They also offer their 'Tesla Powerwall', enabling customers to store cheap and renewable energy. Pulling this all together, with the power of their brand, and you have a very appealing and competitive proposition which other suppliers will need to try to compete against."

James Ward, CEO, CompareYourBusinessCosts.co.uk, said: "Tesla entering the UK energy market could really shake things up. Tesla's known for its innovation, and their energy storage solutions might lower costs by smoothing out supply and demand mismatches."

However, he pointed out: "But it's not all straightforward. Navigating the UK's regulatory landscape is incredibly challenging. They'll have to get past Ofgem's licensing and make sure their systems integrate with existing infrastructure.

"With big names already dominating the market and a whole host of smaller suppliers going bust during the energy crisis, Tesla will need to show they can bring something new, perhaps by tying energy solutions to their EV ecosystem.

"The market and consumers often benefit from increased competition, but the challenge is in the execution and adaptability to local markets."

Tesla Energy Ventures applied for the licence last month, according to a new filing published by Ofgem. The application was signed by Andrew Payne, director of the group's energy business in Europe.

The move comes around two years after Tesla first started hiring for a head of operations to run its proposed energy supply business.

Tesla has been involved in the UK energy market since 2020, when it was granted a licence to be an electricity generator. In the US, the group has been an electricity supplier in Texas for the past three years.

It comes amid a backdrop of waning demand for Tesla's electric vehicles across Europe in recent months.

Industry figures showed an almost 60% plunge in the number of new Tesla registrations in the UK in July, compared with a year earlier. Data showed that 987 new vehicles were registered in the UK in July compared with 2,462 in the same month a year earlier.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Tesla is looking to diversify further into the electricity market by lodging an application to power homes in the UK. Although its EV sales have dipped sharply this year, it still boasts significant car ownership in the UK and has sold thousands of home storage batteries here.

"This could mean Tesla Electric has access to a willing customer base, especially if it follows the model of its business in Texas, which allows owners of its EVs to charge their cars cheaply and pays them for feeding surplus electricity back to the grid.

"It's another example of Tesla shapeshifting away from being a car maker to an infrastructure and robotics giant."