Tesla tests waters in Germany for expansion of energy utility business

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During the second quarter earnings call, Elon Musk discussed the inherent potential of Tesla Energy. According to the CEO, Tesla Energy has a lot of leeway to expand simply because the utility industry is much larger than the auto market. And if Musk’s recent visit to Germany and the company’s recent initiatives are any indication, it looks like Tesla is now testing the waters for a potential push in the country’s energy market.Tesla recently acquired a license that would allow it to trade electricity across Western Europe. The electric car maker also polled potential customers in Germany about the idea of ​​using Tesla energy in their vehicles. As stated in a Reuters report, consultants and energy industry executives believe these strategies could pave the way for Tesla, perhaps with one or more partners, to expand into the German utilities sector. Such a decision would be strategic, given that the country is the largest electricity market in Europe.

Interestingly, the survey Tesla sent to German customers was about switching from an existing energy supplier to a new electricity supplier. The questionnaires were sent out about a month after Tesla became a member of the Paris-based power exchange EPEX Spot, a platform used for intraday cross-border electricity trading. Survey questions, which were retrieved by Reuters, alluded to some of the company’s speculated technologies, such as vehicle-to-network (V2G) capabilities for its vehicles.

“What would encourage you to leave your existing energy supplier?” The survey noted, adding, “Would you buy a Tesla photovoltaic system and home storage (Tesla Powerwall) if you could upgrade to a specially designed Tesla electricity tariff?” The survey also asked if customers would be willing to allow Tesla to control when their vehicles are billed.

Industry executives and consultants have noted that such a system could allow the company to match billing with cheap electricity rates during off-peak hours. It could also open the doors for Tesla to use energy collected by its customers to help balance the electricity grid, an increasingly important service in Germany as the country begins to embrace more renewable solutions.

True, Tesla is only in the early stages of expanding its energy business, but the company has taken visible steps to achieve this goal in recent months. In May alone, Tesla applied for a license to supply electricity to the UK. This app has been approved, paving the way for the company’s battery storage products and Autobidder software to test UK utility sector waters.

Berthold Hannes, a consultant with 30 years of experience in energy consulting, said an expansion in the utility sector actually makes sense for a company like Tesla. “The next obvious step for Tesla is to go into production, especially renewable energy. Tesla could use its own locations, for example, factory rooftops or charging station sites, and alternatively, or in addition, it could take stakes in solar power plants or wind farms, ”Hannes said.

During the Q2 2020 earnings call, Elon Musk explained that Tesla Energy plays a major role in the company’s mission to accelerate the world’s shift to sustainability. “Tesla Energy will be roughly the same size as Tesla Automotive. The energy sector is collectively more important than the automotive sector. So you say, how big is the energy sector? It’s bigger than the automobile. And to achieve a sustainable energy future, we need to have sustainable energy production, ”said the CEO.

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