Tesla is set to enter the UK energy market by applying for an electricity supply license, potentially launching Tesla Electric in 2026.

This move could disrupt established energy providers like Octopus Energy and British Gas, who have already begun innovating with smart tariffs and energy management solutions.

The application was submitted by Tesla Energy Ventures, the company's energy subsidiary based in Manchester, allowing for the possibility of providing electricity to homes across England, Scotland, and Wales.

This expansion comes at a challenging time for Tesla, as its vehicle sales in the UK have plummeted over 60% year-over-year as of July 2025, resulting in a market share drop to just 0.7%.

The significant decline in electric vehicle sales presents both a challenge and an opportunity for Tesla to diversify its offerings.

Tesla's strategy includes leveraging vehicle-to-home (V2H) technology, which allows electric vehicle batteries to power homes during peak demand, enhancing energy efficiency.

The new service is expected to integrate with Tesla's electric vehicles and Powerwall home batteries, potentially offering cost savings on household energy bills.

With tens of thousands of Powerwall batteries already sold in the UK, Tesla is well-positioned to create a seamless energy ecosystem for consumers, leveraging its existing customer base of over 250,000 vehicles.

Tesla's previous partnership with Octopus Energy ended in 2023 as the company shifted focus towards advancing its own energy plans.

Public reaction to Tesla's plans has been mixed, with enthusiasm for innovation tempered by concerns over regulatory challenges and competition.

The process for obtaining the electricity supply license can take up to nine months, with stricter regulations in place following the 2021 energy crisis.

This application reflects Tesla's ambition to transition from being solely a car manufacturer to a comprehensive energy solutions provider, aligning with the UK's renewable energy goals.