As per documents revealed by market regulator Ofgem, Tesla has applied for entering a new sector in the United Kingdom- that of electricity generation. While there have not been any official statements from Tesla regarding the same, filings with the industry regulator have revealed what Tesla may be planning.
The company has recently submitted its application to Ofgem for registering itself as a power generation company in the United Kingdom. The application is specifically to allow it to ‘supply or enable supply to be provided’ in Great Britain, the Renewable Energy Sone and in territorial seas that are adjoining Great Britain. Evan Rice, who is the Sales Director for Tesla’s energy products, had signed off on this application.
Tesla has not explicitly stated what the purpose behind this application is. Market suggestions hint that it could be something like the company’s battery storage project that it had built-in 2016 in Australia. The company built the largest Li-Ion battery in the world in 2017 that helped supply the electricity in South Australia.
This is not the only indicator that Tesla may be looking to enter the market. The company also has its Autobidder platform. This allows for the automation of trading energy for small companies, generating revenue from batteries and trading in real-time. This platform is currently under-use at their South Australian Hornsdale Power Reserve.
Whether Tesla plans to build large-scale battery plants anywhere in or near Great Britain is not clear yet. Through the Autobidder platform, Tesla can sell energy to the grid.
The company has built its battery business significantly over the past years. They already have a significant presence across the United Kingdom as a major electric-car manufacturer. Despite being termed as the ‘new kid on the block’, Tesla’s electric cars were one of the most attractive purchases among those who were purchasing an electric vehicle for the first time.
Across Europe, Tesla is already on the top of the battery-electric segment. It sold over 37,00 Model 3s across Western Europe between February and June 2019. Compared to Renault Zoes 24,231 sales and Nissan selling only 16,200 or so Leaf’s in the 1st half, Tesla’s number indicates how it is well ahead of most competitors in the market.
Tesla already has several battery-powered products in other markets. The Powerwall is a version of the Tesla battery for home-use. This pricy solution costs several thousand pounds and needs solan panels to work. The company also manufactures batteries for storage of renewable energy for industrial and domestic purposes.
Tesla and its CEO Elon Musk have been in the news for a variety of other reasons as well. Just recently, Elon Musk tweeted that the company’s stock price was ‘too high’. The immediate effect of this was a 9% fall in the company’s stock price in a single day. Over $13 billion or £10.2 billion was wiped from the firm’s total market cap due to this.
Elon Musk has also been increasingly critical of the lockdown measures in the US, which have stopped production at the carmaker’s factory in California. Musk described the enforced lockdown as fascist and one that was a serious risk to the company. There was no date by which their production would start. However, Musk defied local California orders and started production at the factory just a few days ago.
The UK government has a vision of a net-zero economy and for carbon-free electricity generation by 2025. Proposals are in the way to expedite the deadline to October 2024. With that considered, Tesla’s entry into the renewable energy generation segment would be a welcome move by the government and consumers alike. It could help bring down the cost for consumers as well. However, with no formal announcement from Tesla yet, the aim and what the future of this application would be remains to be seen.