Could Tesla start to power Germany?
Affluent and eco-conscious Germany is a natural fit for Tesla. However, so far sales in Germany have been modest compared to other European markets, and the reason seems fairly obvious—the country is an auto industry powerhouse, and many Germans are fiercely loyal to their local brands.
Above: Tesla Model S (Image: EVANNEX; Photo by Casey Murphy)
Building a new Gigafactory in the heart of the European auto industry is a courageous move that’s sure to give Tesla a boost in this important market. Elon Musk recently visited Giga Berlin. Afterwards, he spent more time in Germany. Amidst visits with politicians and partners, he even met with VW's Chair Herbert Diess for a test drive of the company's new ID.3. His critique? "Pretty good" for a non-sporty car.
So what's developing (quietly) for Musk and Tesla in Germany? No, not a partnership with VW. Something else. In addition to producing cars, and possibly battery cells, at Giga Berlin, Tesla may just have another electric ace up their corporate sleeve—a plan to enter the German energy market as a provider of renewable electricity.
Tesla has developed a software product called Autobidder that some say will enable Tesla Energy to become a giant distributed global utility, and, as Reuters reports, the company recently secured regulatory approval to trade electricity across Western Europe.
What’s more, Tesla has been surveying customers in Germany about the possibility of using Tesla-branded electrons to power their cars. Could it be that the electric upstarts mean to take on not only the powerful German auto brands, but major electric utilities as well?
Tesla already sells solar panels and the Powerwall battery storage system. For customers, buying electricity from Tesla, and using their home battery systems to provide services to the grid, could be an attractive package deal (shades of Apple’s smoothly integrated suite of products), and quite possibly save them some money to offset the cost of a sporty Model 3 or Model Y. For Tesla, it could be a competitive advantage over the European automakers, none of which offer anything of the kind.
Above: Tesla's Elon Musk travelled to Germany amid the company's energy-market push (YouTube: Reuters)
In June, according to Reuters, Tesla joined the Paris-based EPEX Spot power exchange, a platform that European utilities use to trade electricity across borders. Soon after, it began surveying German consumers about their interest in energy services.
“What would encourage you to switch from your existing energy supplier?” Tesla asked potential customers. “Would you buy a Tesla photovoltaic system and home storage (Tesla Powerwall) if you could switch to a specially designed Tesla electricity tariff?”
Once Tesla has thousands of vehicles hooked up to its system, it could control the cars’ charging times to shift consumption away from peak times, allowing customers to take advantage of special off-peak electricity rates. Of course, this is something any EV owner can already do, if their utility offers a time-of-use (TOU) rate, as many European providers do. However, for customers who own Powerwalls, and who sign up for Tesla’s energy ecosystem, the benefits could be even greater, as the system could provide grid-balancing services, generating income that Tesla could share with customers.
Tesla won’t be moving into a vacuum—there are several companies offering similar services in Germany, including Sonnen (owned by oil giant Shell), Next Kraftwerke and Lichtblick. Furthermore, energy experts told Reuters that Tesla is a long way from having enough battery assets to deliver frequency regulation at grid scale.
As long-term Tesla-watchers know, however, the company is always proactive about building assets to support future activities, and it seems plain that it is laying the groundwork to become an energy provider. Germany isn’t the only market it’s interested in. Autobidder is already operating at Hornsdale Power Reserve in South Australia (at one time "the largest lithium-ion battery in the world”), among other sites. “Autobidder has hundreds of megawatt-hours of assets under management that have supplied gigawatt-hours of grid services globally,” says Tesla. In May, the company applied for a license to become an energy provider in the UK, where it has installed several Powerpack projects.
“The next and obvious step for Tesla is to get into production, especially of renewable power,” energy consultant Berthold Hannes told Reuters. “Tesla could use its own locations, for example the roofs of plants or the sites of charging points, and alternatively, or in addition, it could take stakes in solar plants or wind parks.”
Written by: Charles Morris