Tesla Pursues UK Energy Market as EV Maker Struggles with Declining Sales in Europe

US energy and electric vehicle company Tesla is seeking to enter the UK energy market to supply electricity to businesses and households in the country. According to UKTech News, the Texas-based firm submitted a formal request for an electricity license to UK energy regulator Ofgem last month.

Tesla Challenges British Gas, Octopus

If the UK regulator approves Tesla’s energy license UK request, the EV maker could start competing with large firms that dominate the energy market as early as 2026. These include British Gas, EDF, E.ON Next, and Octopus Energy.
Tesla’s application for a UK license was submitted by Tesla Energy Ventures, the company’s subsidiary based in Manchester. The application was signed by its European energy operations manager, Andrew Payne.
Following the application, Ofgem will collect public commits by August 22, 2025. A final decision will be issued within 2026.

Tesla’s Energy Supply in Texas

Tesla is best known for its leadership in electric vehicle production. The company also makes solar energy systems and battery energy storage products.

Musk’s energy subsidiary, Tesla Electric, has been supplying electricity in Texas. Founded in 2015, the company applies the battery technology designed for Tesla vehicles to homes. The subsidiary grew rapidly in 2016 after it acquired SolarCity for $2.6 billion.

Since 2022, Tesla Electric has been supplying energy in homes, allowing customers to optimize consumption while paying them to sell excess energy back to the grid. Tesla first revealed intentions to sell electricity to homes about two years after it posted a job listing seeking an operations head.

The company’s first attempt to enter the UK energy market was in 2020 when it acquired a license to generate electricity. Although its latest license request to provide energy in the UK would be backed by substantial resources, Musk’s association with far right politics could hinder the company’s growth. This was reflected in Tesla’s recent sales in the UK after they dropped by 59%. Tesla’s market share in the UK has been dropping steadily due to negative sentiments surrounding CEO Musk.

Struggling with Dipping EV Sales

Tesla’s decision to acquire a license to supply electricity to UK households comes at a time when its sales in Europe have been dropping. Earlier this month, Tesla’s July sales of China-made electric vehicles dropped by 8.4% compared to the previous year amid growing competition from Chinese EV makers that now offer lower-priced models.

In the UK, data from the Society of Motor Manufacturers and Traders showed that new Tesla sales in the country dropped by about 60% in July 2025, from 2,462 a year ago to 987. In Germany, Tesla sales dropped by 55.1% in July.

The dipping sales highlight the challenges that Tesla has been facing in recent years. These include stiff competition from Chinese EV makers and reputational damage following Musk’s close relationship with US President Donald Trump that led to his involvement with the Department of Government Efficiency (DOGE).