Cracking the Grid: Why Tesla Wants a Piece of Britain’s Energy Future

Image Credit: Tesla

Tesla has officially applied to Ofgem, the UK’s energy regulator, seeking a licence that would allow it to supply electricity directly to homes and businesses across England, Scotland, and Wales.

The filing, signed by Andrew Payne, who leads Tesla’s European energy operations, was made in late July 2025. If approved, it could see Tesla competing with established UK energy providers as soon as 2026. The company plans to build on its existing footprint in solar power and battery storage to support this new venture.

Tesla’s energy division already has a presence in the UK through its solar technology and its growing network of residential battery storage units. More than 250,000 Tesla cars are currently on British roads, and tens of thousands of households have installed Tesla home battery systems. Together, they represent a ready-made customer base for an energy supply service.

The model is not entirely new. In the United States, Tesla operates a similar scheme through Tesla Electric, a Texas-based supplier. There, Tesla owners benefit from discounted charging rates while households with surplus energy from solar panels can sell power back into the grid.

Image Credit: Tesla

In the UK, the appeal could be even greater. Interest is rising in decentralized energy systems, where households generate and store their electricity while still drawing on the grid when needed. Such systems not only give consumers greater independence but also help stabilise national energy demand as more renewable sources come online.

Tesla’s move into the UK energy market comes at a time when its vehicle sales in Europe are under pressure. In July, UK registrations dropped by nearly 60 percent, while sales in Germany fell by more than 55 percent. Across ten major European markets, Tesla’s overall sales declined by 45 percent. Much of this decline has been attributed to mounting competition from rivals, particularly China’s BYD.

Expanding its energy business provides Tesla with another path for growth. By offering households and businesses a combined package of hardware, software, and electricity supply, the company can deepen customer loyalty while diversifying its revenue streams.

US President Donald Trump and Elon Musk in a Tesla, during Trump's address on the company outside the White House | Credit: NBC

Public perception also plays a role. Tesla’s falling sales have not been driven solely by competition. Some consumers have turned away from the brand due to Elon Musk’s growing involvement in politics. His outspoken support for US President Donald Trump and his controversial statements on his social media platform, formerly known as Twitter, have alienated parts of the public, leading to calls for boycotts.

Although Musk’s political focus is mainly American, he has not hesitated to discuss the UK. In interviews and online posts, he has described Britain as a “police state” run by a “tyrannical government.” He has criticised policies on migration and asylum seekers and voiced strong opposition to the Online Safety Act.

These remarks could complicate Tesla’s entry into the UK energy market. While Ofgem evaluates licence applications on operational and financial grounds, Musk’s high profile ensures that political and public reactions will also come into play.

Former Homelessness Minister Rushanara Ali recently warned that the UK may need stricter rules to guard against foreign political interference. Her comments highlight the potential hurdles Tesla could face, even if the company meets Ofgem’s regulatory requirements.

Tesla’s UK energy ambitions could transform its role in the market, shifting its image from an automaker to a broad-based energy company. Whether political turbulence surrounding Musk hinders that shift remains to be seen.

“Although it is clear that foreign donations to political parties and other campaigners are illegal, the Government recognises the continued risk posed by actors who seek to interfere in our democratic process,” she said.

“The current rules no longer match the sophistication and perseverance of those who wish to undermine our laws, and that threat must be addressed through stronger safeguards.”