Tesla seeks approval to supply electricity to UK homes – could it disrupt the energy market?

Tesla has applied to the regulator Ofgem for a license to supply electricity to UK households. This move suggests the e-vehicle giant has ambitions to challenge big energy suppliers like British Gas, OVO and Octopus.

Tesla has only applied for an electricity license meaning households on a dual-fuel contract (electricity and gas) may be less interested in switching, if the company’s application is ultimately approved.

The application was published on the regulator’s website on 25 July and could take up to nine months to be processed.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Elon Musk’s company already has an electricity supplier in Texas called Tesla Electric, launched in 2022. It describes itself as “a retail electricity provider that helps you power your home, charge your electric vehicle and support the grid with low-cost, 100% Texas-generated sustainable electricity”.

Texan customers don’t need to own a Tesla product to be eligible, suggesting a similar model could be adopted in the UK if Ofgem approves Tesla’s application. Tesla owners could be more likely to use the provider, though, thanks to possible perks like cheap charging.

“Although its EV sales have dipped sharply this year, Tesla still boasts significant car ownership in the UK and has sold thousands of home storage batteries here,” said Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown.

“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.”

Taking on the ‘big six’ providers and disrupting the UK energy market could be easier said than done, though.

“Tesla is entering a heavily regulated market in which margins have been squeezed to the narrowest possible extent and in which it faces competitors who have already invested in novel tariff offers,” said Adam Bell, ex-head of energy at the department for business, energy and industrial strategy, now director of policy at consultancy group Stonehaven.

“Even with access to an ecosystem of Tesla EV and Powerwall owners, it will find making headway challenging,” he told MoneyWeek.

Could Tesla disrupt the energy market?

Taking on the biggest energy providers is no easy feat. The share of the domestic energy market held by small and medium-sized suppliers fell to just 8.6% in the second quarter of 2025, according to figures published last month by consultancy Cornwall Insight.

The six largest suppliers now make up more than 90% of the domestic market – a far larger share than before the energy crisis.

“Tesla’s entry into the UK electricity supply market could add competitive pressure and bring more innovative tariff options, particularly for EV owners and households with solar panels who have the flexibility to shift demand,” said Bridget Payne, head of energy forecasting at advisory firm Oxford Economics.

“While this supports wider system decarbonisation goals identified by National Grid and the National Energy System Operator (NESO), time-of-use tariffs are already available in the market, so the move may be more of an evolution than a disruption.”

Back in 2020, Tesla partnered with Octopus Energy to launch the Tesla Energy Plan – a smart import/export tariff for those with solar panels and Tesla’s energy storage batteries. The plan allowed customers to access electricity at discounted rates and sell excess energy back to Octopus for the same price.

Tesla ended the plan three years later but Octopus still offers a similar plan through Octopus Flux.

Other providers also offer time-of-use tariffs which vary the cost of electricity based on the time of day you use it. These and EV tariffs can be popular among those with electric vehicles.