A Tesla subsidiary has applied to become an electricity retailer in Texas, moving to widen the energy ambitions of Elon Musk’s electric-vehicle company in a state with a power grid that came under scrutiny after failing in a February winter storm.
Tesla Energy Ventures, a subsidiary of Tesla formed in late July, wants to sell power directly to customers as a retail electricity provider, according to an August 16 filing with the Texas Public Utility Commission.
Shares in Tesla were 0.6% higher in U.S. premarket trading on Friday, outpacing a rise in futures for the Nasdaq 100 index, of which Tesla is a component.
Tesla also intends to build two massive utility-scale batteries to serve power companies in the state, according to Texas Monthly,which first reported the news on Thursday and said that the filing could be approved by November.
One of those batteries would reportedly be located at a gigafactory outside Austin, where the Cybertruck and Model Y SUV are slated to be built, with another located outside Houston,based on a report from Bloomberg.
Texas’ deregulated power grid includes well over 100 companies selling to consumers. The state’s power system came under the spotlight this winter, when a February storm left millions without electricity for several days.
Tesla hoped to enter the Texas power market earlier, before the widespread blackouts in February, according to the Texas Monthly report.
The company has a history of building utility-scale power storage, with developments in California and Australia, but becoming an electricity retailer in Texas would be a significant milestone in the expansion of Tesla’s energy division.
“I can’t emphasize enough, I think long term, Tesla Energy will be of roughly the same size as Tesla Automotive,” Musk told investors last summer, after the company’s second-quarter earnings in July 2020.