Tesla dips its toes in electricity retailing market: Five things to know

Highlights

• Having successfully ventured into the space of electric vehicles (EVs) and energy storage systems, Elon Musk’s Tesla is eyeing the electricity retailing market in the US.
• Elon Musk-led Tesla plans to sell electricity directly to consumers.
• There are nearly 120 companies currently operating in the business of electricity retailing across Texas.

Having made a strong mark in the space of electric vehicles (EVs) and energy storage systems, Elon Musk’s Tesla is now eyeing the electricity retailing market in the US. The popular EV maker has plans to sell electricity directly to consumers, with a focus on those who already own Tesla cars.

The largest EV manufacturer in the world already installs solar panels on homes/other buildings. It may take time for further details to emerge since exact plans are not included in the application filed with the Public Utilities Commission (PUC) of Texas on 16 August 2021.

The company is also building large energy storage facilities, including one near Houston. There are nearly 120 companies currently operating in the business of electricity retailing across Texas.

Here are five key points to know:

Tesla plans to tap its existing customers

Tesla plans to become a "retail electric provider" (REP) under its subsidiary Tesla Energy Ventures, according to a filing with the Public Utilities Commission (PUC) of Texas. The company eyes its existing customers at first and plans to target them via its mobile app and website.

Source: © joeduffy1   | Megapixl.com

"In addition to the Tesla mobile application and Tesla website, the applicant's existing 'Tesla Energy Customer Support' organisation will be trained to provide support and guidance to customers in customer acquisition efforts," the company said in its filing.

Musk bets on Tesla Energy for future

Musk had announced in 2020 that he expects Tesla Energy to become roughly the same size as Tesla Automotive in the long term. In the quarter ended June 30, Tesla sold 201,250 electric vehicles and recorded a revenue of US$10.2 billion.

Musk, who recently moved to Texas, also said that Texas needs more electrical storage.

Have you heard about ‘Megapack’?

Tesla is already running ‘Megapack’ which is its low-profile business of building large batteries to store utility-scale amounts of electricity. In a 2019 blog post, Tesla said:  "Battery storage is transforming the global electric grid and is an increasingly important element of the world's transition to sustainable energy.”

Tesla further said that it engineered a new battery product specifically for utility-scale projects to match the global demand for massive battery storage projects like Hornsdale. As of now, Megapacks have only been sold to other firms and not directly to customers. However, things are expected to change with this latest PUC filing.

Source: © Sergiomonti  | Megapixl.com

Ana Stewart to lead the firm

Ana Stewart, who has been with the company since 2017 in the capacity of the director of regulatory credit trading, is listed as president of Tesla Energy Ventures. She was earlier associated with Tesla-acquired SolarCity. The PUC application is listed under docket number 52431.

Request to PUC comes after Texas’ winter storm

Tesla made a request to the PUC for entering electricity retailing market just six months after an unprecedented winter storm closed large parts of Texas’ power grid for days. As a result, millions were left stranded without power during chilly winter days. It also resulted in the wholesale electricity prices shooting up to US$9,000 per megawatt-hour compared to the seasonal average of nearly US$50.

Bottom Line

With Tesla eyeing Texas’ electricity retailing market, competition is expected to heat up. As already mentioned, there are nearly 120 firms operating in the segment. Since scant details are available about the plans in the application, we need to wait further to see how things are going to take shape going forward.

Meanwhile, Tesla’s shares advanced 1.5% on Friday, hovering at US$712 per share.

RELATED ARTICLE: Tesla (TSLA) eyes humanoid robots to beat labor shortage

RELATED ARTICLE: Tesla races past a milestone, hits US$1 billion in revenues for first time