Tesla may make heat pumps for homes, says Musk

TESLA could manufacture heat pumps to replace gas boilers in people’s houses, its co-founder Elon Musk has said, in a potential boost to the appliances amid sluggish installations.

“At some point we might make a heat pump for the home,” Mr Musk told investors, as the billionaire outlined his “master plan” for Tesla.

Manufacturing the pumps would push Tesla further into people’s homes, moving it away from primarily being an electric vehicle manufacturer to a wider renewable energy company.

The company already sells battery storage systems and solar panels to households.

Tesla said switching from gas boilers to heat pumps would cut 22pc of global fossil fuel use, compared to 21pc for using electric vehicles instead of combustion engines.

Heat pumps, which take heat from the air or ground to warm radiators and water, are seen as crucial to moving households away from fossil fuels and towards renewable heating, but installations of the devices have been slower than hoped in Britain.

The Government plans to ban new gas boilers from 2035, a key part of its 2050 net zero ambitions. However, installations of heat pumps so far have been significantly behind Government targets.

Mr Musk outlined how he expected the world to convert to an “electric economy”, saying it would cost 1pc of global GDP to switch to batteries and solar and wind power over the next decade.

He was expected to later unveil plans for a cheaper vehicle that would open up electric cars to new buyers.

Such a vehicle would be significantly cheaper than the £42,990 Model 3, and move Tesla from a premium manufacturer to a truly mass-market producer. Mr Musk has previously said that he wants Tesla to make a $25,000 (£20,778) vehicle.

The average electric car in Britain costs more than £40,000. Last week Stellantis, the company behind Vauxhall, Peugeot and Fiat, said that its high prices make them unaffordable for the middle classes.

Tesla is seeing growing competition from established car companies, which are promising to provide more choice by electrifying a wide range of models, and from Chinese upstarts, which are seeking to undercut the American company on price.

The carmaker’s shares plummeted by 65pc last year but they have rallied in recent weeks, and Mr Musk has regained his status as the world’s richest man.