Tesla is closing down solar panel sales and installation facilities in nine states, Reuters reports, citing current and former employees of the company's solar business as well as internal documents.
The documents name 14 solar panel installation locations of what was previously SolarCity across nine states as well as a suspension of a retail partnership with Home Depot. This partnership, Tesla employees told Reuters, brought in half of the solar business' sales.
This leaves Tesla's solar operations with 60 sales and installations facilities nationwide. The company has declined to provide details as to the size of the workforce that will become redundant with the closures. Last week, Tesla said it will cut its total staff by 9 percent as it strives for greater cost efficiency.
Regarding the end of the partnership with Home Depot, the move is part of a strategy to make SolarCity's business an organic part of Tesla, including selling its products via Tesla stores and the company's website. Reuters, however, quoted an analyst as saying the message that the market received with the shutdowns and the end of the Home Depot partnership was that Tesla had "no strategy for selling solar." Related: Permian Bottlenecks Begin To Bite
Tesla acquired SolarCity for US$2.6 billion plus the assumption of another US$3 billion in SoalrCity debt in 2016. At the time many questioned the wisdom of such an acquisition given that SolarCity was a cash burner, but since then Tesla has streamlined the company's operations as it pursued its plan of growing into a one-stop shop for energy solutions, from batteries to solar rooftops.
Right now, Tesla's number-one priority is to meet the deadline for ramping up the Model 3 production rate to 5,000 cars weekly, which should happen by the end of this month. The company is facing growing investor concerns about its approach to cash and deadlines, so chances are it will really try to meet this deadline, whatever it takes.
By Irina Slav for Oilprice.com
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Comments
Tesla is shuttering the now obsolete solar leasing business. It was for a long time the largest installer across the country but times change. It is now far better to own, not lease Solar on your own home. When business conditions change so must a business.
In any analysis, Tesla Motors shareholders got hosed for $3-5B.
And there remains the question of "self dealing" by Musk in order to save his relative, Mr. Rive.