Tuesday, August 24, 2021
Attack on the energy market
Tesla becomes an electricity provider
By Christina Lohner
After solar systems and electricity storage systems, Tesla is now also offering its own electricity tariff in Germany. So will the e-car manufacturer soon also revolutionize the energy market? Some energy giants are following the advance with eagle eyes. But experts’ forecasts diverge widely.
What the German auto industry is experiencing could also flourish for energy suppliers: That Elon Musk stirs up their industry. Because Tesla is now also selling electricity in Germany – still for a very small customer base, but it should soon be larger.
So far, the green electricity tariff can only be booked by consumers who have both a solar system and Tesla’s electricity storage system for their home – the “Powerwall 2” – and only in Bavaria and Baden-Württemberg. “In short,” the offer is to be extended to all of Germany, as stated on the homepage of the electricity provider Octopus Energy, through which Tesla is offering its electricity tariff. The beginning of next year will be realistic, confirmed its spokeswoman on ntv.de request. The British electricity provider is also currently exploring further collaborations with Tesla – which may then also be of interest to customers who do not have a solar system or power wall.
Musk wants nothing less than to make the entire energy market more sustainable. Some in the industry are therefore watching the advance on the German electricity market with eagle eyes. “Just as Tesla has changed the rules of the game in the automotive sector, we also trust them to disrupt the energy market,” the “Handelsblatt” quotes a representative of an energy company. “We take Tesla very seriously and watch exactly what they are up to,” says one of the major power companies. Energy market analyst Klaus Kreutzer from Kreutzer Consulting also trusts Tesla to become a serious player on the electricity market. Tesla is already active on the market in Great Britain, among others.
“Car manufacturers try everything possible”
But not all industry experts believe in a great success. “Producers like RWE shouldn’t fear anything,” said Nord LB analyst Holger Fechner to ntv.de. In his ears the whole thing sounds like an “advertising measure to offer customers more”. Even his colleague Frank Schwope, auto analyst, does not believe in the revolution of the electricity market after the revolution in the electric car market. He only sees additional business in the electricity tariff.
VW also offers its own green electricity tariff. Many car manufacturers are currently trying everything possible, as Schwope ntv.de explains. “Maybe they’ll sell their energy daughters to energy giants again.” As with car sharing, for example, the car companies tried to find out where they could earn money in the future using the trial-and-error principle. To do this, they tested various business models – now the sale of electricity. Schwope also does not believe that Tesla will drive out of its niche in Germany and achieve double-digit market shares, after all, the Americans sell premium models.
Energy market expert Fabian Huneke from Energy Brainpool sees an opportunity for Tesla. Because the brand name is often decisive for the sales success of an electricity provider, he tells ntv.de. But new electricity distributors rarely changed the established mechanisms of the market. “Changing the electricity provider often brings only relatively minor savings for end users,” says Huneke. Therefore, the basic supplier in a region is usually “not afraid” of new competitors.
The numbers are still red
In addition to electricity, solar systems and storage systems for private households, Tesla offers large customers and companies huge electricity storage systems, the “megapacks”. In Australia, Tesla’s “Autobidder” is also in use – which could also compete with established energy suppliers. Electricity is traded automatically via the platform, as the “Futurezone.at” portal explains. Electricity is bought and stored in power walls and car batteries when it is particularly cheap – and sold when it is particularly expensive or needed. Machine learning optimizes retail, according to Tesla. Both customers and car manufacturers can earn money by storing electricity, something that other car companies are also trying out.
However, this is also necessary. After last year in the red, analyst Jed Dorsheimer from the investment bank Canaccord Genuity expects, according to “Handelsblatt”, that Tesla Energy will increase its sales to eight billion dollars by 2025 – with a gross profit margin of 25 percent.