Elon Musk tried to launch rockets into space, developed a plan to cover the sky with satellite internet coverage, and spent $44. bn about the takeover of one of the world's largest social networks.
Now the billionaire has set his sights on an entirely more conventional enterprise; UK Electricity Retail Market.
A job listing posted on LinkedIn revealed Tesla is developing plans to register as an electricity supplier with the industry regulator and launch a “UK retail electricity product”.
< p>The service, which will be available to owners of the company's Powerwall home battery, is expected to allow the sale of electricity to UK households and buyback of stored energy at times of peak demand.
But experts warn that while such innovation is badly needed as the government seeks to zero net income, Musk faces a plethora of licensing regulations, red tape and low profitability that could hamper his takeoff.
“It's going to be hard for them [Tesla] to make money within five years,” says Adam Bell of strategy consulting Stonehaven.
Until 2021, Bell led energy strategy in what is now the Department of Energy Security and Net Zero.
More importantly, he says Musk won't be able to get a license if he only plans to sell electricity to people with a home Powerwall battery.
Tesla Powerwall home batteries have allowed owners in Texas to earn up to $150 a day by selling power back to the grid.
“If you are an energy supplier in the UK, you have what is called a universal service obligation. This means that you are obliged to offer a tariff to everyone who wants it. You cannot simply limit your offer to a limited number of customers,” says he.
The legislation helps ensure that customers with debt, bad credit scores and other payment problems can still get contracts to access gas or electricity, he adds.
Despite Tesla being the world's largest manufacturer of electric vehicles, it will also sell household batteries. Households with solar panels are among those buying Powerwall batteries, which cost around £9,500 to install.
Industry insiders say between 10,000 and 20,000 families have adopted them.
Late last year, Tesla launched an energy supplier in Texas where households with Powerwall batteries in certain areas can sell electricity back to the grid during peak hours and buy it back when it's cheaper.
Consumers in Texas reported they were earning up to $150 (£116) a day during the heat wave from selling surplus electricity.
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Under Musk's plans, households will also be able to sell surplus electricity – such as from solar panels – back to the grid.
Ofgem, the energy regulator, plans to eventually allow electric vehicles to also sell electricity back to the grid. This means Tesla drivers will also be able to use the service.
Providing enough power when needed is a tricky balance that is becoming increasingly difficult in the transition to clean energy.
< p>The unpredictability of when the sun is shining or the wind is blowing means there is scope for innovation to help improve the balance of supply and demand, says Bell of Stonehaven.
Suppliers are required to notify the National Electricity System Operator (ESO) half an hour if their estimates of consumer needs are too low. Then ESO steps in and pays consumers to tailor their usage.
“The balance action was critical as our system allows for more renewable energy. More money can be made there as a result,” says Bell.
However, the job posting revealing Tesla’s plans suggests that the company plans to go further in the UK than building a so-called virtual power plant similar to those it has already launched in Australia and California.
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One way to bring electricity to all Britons is through the use of innovative smart products.
Katherine Porter, energy consultant at Watt-Logic, says such a model would be similar to how telephone contracts work.
“This is not a completely new idea,” she says. “Just like when you get a mobile phone on a two-year contract, you pay for the phone over two years. You receive phone calls and everything related to it. People thought we might see similar patterns in the energy market.”
However, Porter says the reason the idea hasn't yet been replicated on a mass scale in the energy market has a lot to do with the industry. wrapped in bureaucratic red tape.
“This is a very regulated market with extremely low margins,” she says. “It really keeps these types of players from getting in. Once you've seen companies like supermarkets dive into the retail energy market, almost all of them are gone.”
Energy providers have a responsibility to install smart meters, and once the number of customers exceeds 250,000, they will also have a responsibility to help improve home insulation and reduce usage.
“People have been talking about energy as a service for a long time, but it is not provided,” adds Porter. Why isn't it being delivered? Because the market is terrible. You cannot make money. You are very burdened with regulation, which really has nothing to do with energy.”
Musk may find a working model by focusing on a niche market, but that won't make much money, Porter says.
Investec's Martin Young adds that applicants must pass a series of tests to obtain a license. But, he says, households can greatly benefit from more innovation in the sector.
“Customers are a key component of the Zero Result journey, and we need innovative products and value propositions. This is even more true for consumers who have high-load devices such as electric vehicle batteries and heat pumps, as well as self-generation from solar energy,” he says.
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Porter from Watt -Logic also says that one of the factors playing in Musk's favor is that his plans target consumers who already own electric vehicles and tend to be better off.
But Musk's ambitions risk being stifled by his desire to do too much. On Wednesday, he announced the launch of xAI, an artificial intelligence company designed to challenge the dominance of OpenAI ChatGPT.
“Announcing the creation of xAI to understand reality,” Musk tweeted.
Musk was previously criticized by Tesla board members for appearing absent-minded and flippant after his highly leveraged takeover of Twitter and causing controversy.
Between running the social media platform, which is now facing intensification competition from humans in space and a dozen other businesses, the world's richest man has a lot to do.
But the potential for using artificial intelligence to optimize mismatches between electricity supply and demand still remains, experts say. This area could play into Musk's hands.
The first challenge will be to survive in a market where more than 30 suppliers have collapsed since the energy crisis began and where more than half of the firms are technically out of business. insolvent.
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