Electric car company Tesla has announced plans to expand into battery technology to power homes and businesses.

The firm's CEO, Elon Musk, unveiled the proposals at the company's design studio near Los Angeles International Airport.

"Our goal here is to fundamentally change the way the world uses energy," he told reporters gathered in Hawthorne, California.

Although Tesla will make the battery, called Powerwall, it will be sold by a variety of other companies. The list of partners includes SolarCity, a solar installer founded by Mr Musk's cousins, Lyndon and Peter Rive.

Mr Musk is SolarCity’s chairman and largest shareholder.

The system will carry a suggested price of $3,000 to $3,500 (about €2,700 to €3,200), depending on capacity.

“I don’t believe this product in its first incarnation will be interesting to the average person,” said Peter Rive, SolarCity’s chief technology officer.

However, Mr Rive still expects there to be enough demand to substantially increase the number of batteries in homes.

Mr Musk believes Tesla and other future entrants into the market will be able to sell two billion battery packs around the world - roughly the same as the number of vehicles already on roads.

Power prices

The batteries are likely to become more useful if utilities and regulators allow power prices to change throughout the day, based on market conditions.

That way, the software that controls the solar and battery system will allow customers to use their home-generated power - and not expensive grid power - when grid prices spike.

Several businesses, including Amazon and Target, plan to use Tesla's battery storage system on a limited basis. Southern California Edison is already using Tesla batteries to store energy.

Tesla is building a massive factory in Nevada that will begin producing batteries in 2017.

PA