Elon Musk always seems to be ready to jump into the next big thing. After his success at PayPal, the fortune he made with Tesla (NASDAQ: TSLA), and his ongoing projects with SpaceX, the eccentric billionaire is now planning a new venture – selling power to Americans directly. According to MarketWatch and a couple of other publications, Musk just started up a new company that would sell energy to the retail market.
A new subsidiary of Tesla, known as Tesla Energy Ventures, filed its paperwork in mid-August with the Public Utility Commission of Texas in order to sell excess energy to Texas citizens. Although details currently are scarce, with neither Musk nor Tesla saying anything about the announcement as of right now. However, some analysts in the past have speculated that Tesla might move into the direct energy business.
One theory floating around is that Tesla Energy Ventures could sell kilowatts that are pulled from Tesla-made home batteries. At the same time, Tesla Energy Ventures could let individual Texans make money from their solar panels by putting that excess energy back into the grid, which can be reused elsewhere. Right now, there are 120 other energy companies that are selling kilowatts in the state of Texas, which is a largely deregulated market for energy providers.
Musk has alluded in the past that he’s considering moving out of California and setting up headquarters in Texas instead. California state taxes have remained prohibitively high for a long time, while Texas boasts no individual income tax on either corporations or individuals. It’s just one of many big tech companies making a move to the state.
According to Texas Monthly, anonymous sources said that Tesla has been planning to move into the deregulated power market for months now. However, plans were pushed back when a massive winter storm hit in February that led to major blackouts. For local energy distributors, the crisis wound up proving catastrophic, with many businesses choosing to leave the market altogether in the wake of the disaster.
Since then, five electric retailers have decided to leave the Texas market amidst the growing competition. However, more are coming to make up for the difference, with 13 companies having filed for approval since the February blackouts.
Shares of Tesla were down around 1.4% on Thursday, although prices aren’t moving much right now in pre-market trading. It’s hard to tell exactly how the news will be seen by investors. Although some analysts might think it’s a sound business move, others might see it as another of Elon Musk’s many publicity stunts.
Tesla Company Profile
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities. The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, Model 3 in 2017, and Model Y in 2020. Global deliveries in 2019 were 367,656 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News
