6 ms·

I still don't understand the SolarCity part. Tesla is atop the best rated electric cars, and has a good trajectory toward that product line future, with lots o

by pdq 10y ago

I still don't understand the SolarCity part. Tesla is atop the best rated electric cars, and has a good trajectory toward that product line future, with lots of innovation ahead. Successful companies like Apple focus on best-in-class products, so Tesla is smart to continue focusing their resources into those product lines. Meanwhile SolarCity has been burning cash on a consistent basis [1], and is sitting in a hyper competitive solar panel industry, where I don't see their competitive advantage. It seems foolish to bring that business inside of Tesla, as if it failed, the debt risk would now affect Tesla's future. As many others have mentioned, a long term licensing deal or partnership avoids those risks. [1] http://www.msn.com/en-us/money/companies/musk-says-solarcity-deal-about-synergy-but-it-may-be-about-debt/ar-AAhu9vZ http://www.msn.com/en-us/money/companies/musk-says-solarcity...

mtgx 10y ago
I think time will tell if the movement proves "foolish". However, there is one reason why this makes sense. Storage batteries and solar panels will go hand in hand for the vast majority of sales. So it makes sense for Tesla to want to control that half of the "solution" for renewable energy generation.
parasdpain 10y ago
Agreed but I feel Musk is not here to do a business; he is here to fix humanity. Normal logic does not apply on him, just like when he used all his earnings from selling Paypal and decided to start a roket company (SpaceX)! Other enterpreneurs literally laughed at him and called him crazy.
- deleted 10y ago
  [deleted]
- gkya 10y ago
  Oh he is the SV Messiah? Honestly enterprise is enterprise. Look what Google have become.
  - TeMPOraL 10y ago
    He's not SV Messiah, he seems to be simply the lucky combination of right perspective on the world and enough money to make it happen. The only bad thing about this is that it is so rare. > Honestly enterprise is enterprise. What I like about Tesla and SpaceX is that they're honest, plain companies. They exist as means to an end. Vehicles to achieve material goals - in this case, sustainable transport and making humanity multiplanetary. This is how all companies should work, and yet somehow we got lost on the way and most companies exist to make money, without giving much shit about how exactly they're making this money.
    - gkya 10y ago
      Companies are in the business of selling things for profit. That's essential to them, because they have to pay taxes, create capital and produce, which are all results of commerce. For this they need to maintain an image. And with the first danger to its image, we've seen how Tesla reacted: statistics manipulation and aggression, instead of admitting its their fault and promising to work for better. So we can't bet on companies' honesty, ever. Elon Musk as a person, is a person. A single person. You say that he "seems to be simply the lucky combination of right perspective on the world and enough money to make it happen." According to whom? Interplanetary travel's possibility and practicality is questionable, let alone human chance of extraterrestrial survival. Some may well think that this is a waste of resources. Sustainable transport is nice -- and I love Tesla cars for being seemingly practical non-fossil cars -- but self-driving cars are a big change and actually requires moral adaptations. Would being killed by a self-operating machine equal to being killed by a manual car? Who is to blame if an accident happens? What do I do if my spouse goes under a self-driving car and it is not her fault? Do I sue the car? What happens if it is found guilty (i.e. it's AI is mistaken)? Do we jail the car? Is Tesla to pay me in indemnity? If my self-driving car hits another car's rear bumper, am I liable? Do I recompensate the other driver? Who is liable if an automatic vehicle breaks some traffic rule? What if it passes when it's red? If all cars are electric, how we'll be affected by increased electric demand? This will mean increased CO2 production with geothermal production, and increased nuclear waste to be disposed off with nuclear production. Will we have to build more dams? Will we instead use the same dinosaur oil to to produce electricity, canceling out the gain? We should think on these, and Musk being a SV angel figure is not an answer to these questions. We did not question anything till the end of the past century, and we are at the edge of a climate disaster. This tech (self-driving) means a great, big change to our daily lives, and it cannot happen because someone who "seems to be simply the lucky combination of right perspective on the world and enough money" wanted it to.
maratd 10y ago
> I still don't understand the SolarCity part. People who buy electric cars are far more likely to buy solar panels. And storage batteries. And wiring they would need for the electric car. It's all directly related. So when I buy a Tesla ... I have to hire a 3rd party to install the wiring to charge it. I can buy the storage battery from Tesla, but again, need to hire someone else to install it. And if I want solar panels for that storage battery, again 3rd party. SolarCity has a fleet of professionals ready to do all of that. They also have a plant to manufacture their own panels, which hopefully they'll be able to differentiate on. Combining the two companies will enable Tesla to service that whole loop with the equipment and installation. Now, you can argue that Tesla may have been better off starting their own division from scratch or buying someone else ... but from what I heard, they're getting a hell of a bargain for SolarCity.
- snowwrestler 10y ago
  > People who buy electric cars are far more likely to buy solar panels. And storage batteries. And wiring they would need for the electric car. It's all directly related. Is this true? I'd be interested in learning more about the data behind this. Anyway, for the sake of discussion let's say it is. Does that mean there is a correlation that scales to the whole population? Or is it just that electric cars and solar panels appeal to the same small segment of the population? That would show a strong correlation, but not scale well.
  - maratd 10y ago
    > Or is it just that electric cars and solar panels appeal to the same small segment of the population? That would show a strong correlation, but not scale well. Tesla is a luxury product company. All of their products are either luxury or commercial. Their strategy scales well in that segment.
  - ne0n 10y ago
    Generally, having an electric car would push your electric bill into much higher usage tiers where the power is most expensive. Solar panels make the most sense for people who use the most electricity and pay the most for it. I've seen first hand that people who drive electric cars like to talk about clean energy and if they've got solar panels on their roof, it refutes the argument about burning coal to generate the electricity. As solar panels continue to drop in price, it starts to make more sense for the rest of the population, too.
pfranz 10y ago
I thought SolarCity's competitive advantage was solar leasing [1]. Which would mean they're sacrificing upfront profits for longer term gains and any dollar spent now would very likely mean profits in the future. I haven't paid enough attention to see how well that's going. Oh, and I've heard Tesla described as "a battery company that makes cars." Solar is also tightly coupled with battery tech since without it they're a lot less useful. Maybe that's the synergy? [1] https://en.wikipedia.org/wiki/SolarCity#Solar_leasing https://en.wikipedia.org/wiki/SolarCity#Solar_leasing
- furyg3 10y ago
  Solar leasing is not going to be profitable, very soon. Solar panels (+ installation) is now pretty cheap and getting cheaper. Subsidies are being removed, financing is available. It's becoming a no-brainer. So they're winning there, but this creates a problem. When a significant portion of homes have solar panels, the power companies can no longer act as a free-ish battery for day/night or summer/winter. They will have to massively adjust their pricing... charging solar homes for storage, paying them a crap daily rate, and charging higher rates a night and in the winter. Regulators will be forced to let them do this because otherwise they will go bankrupt. This screws with the solar leasing model. Tesla makes big batteries that happen to have wheels on them, which gives a lot of room to innovate here. They can smooth out the day/night cycle; car/home owners can profit from the low energy price instead of be punished by it (especially if you're uber-ing out your car); used car batteries that aren't ideal for continued usage in cars (say 70% capacity or slower charge/discharge rates) are fine for power smoothing in your basement, etc.
davidz 10y ago
The product isn't solar panels, it's energy. With a huge fleet of electric cars needing to be charged in major metros, where is the electricity coming from? What if you also have a massive deployment of solar panels on top of existing real estate, that you essentially don't have to pay rent for? When Teslas are autonomous, and owners are using them to make money by giving other people rides. How are these cars getting charged? And that energy doesn't come for free. Tesla will have their hand in every piece of transportation.
OliverJones 10y ago
I'm doing business (in my household) with both Tesla and Solar City. I can tell you this about Solar City: They're doing with roofing and power meters what Tesla is doing with vehicles. They're promoting a location-aware distributed electric-distribution grid. We're lucky right now that the government's promotion of PV is putting the burden of power storage on the power-grid operators. Without net metering, this stage of PV would never happen. But net metering is essentially bad for the grid operators; they get paid nothing for storing power or sending it from a net producer to a net consumer. They will eventually prevail like they tried to do in Nevada earlier this year and buy power cheaper than they sell it. But in the meantime the power grid companies haven't got a chance without competition. My home electric meter is as dumb as a box of hammers, even though I spend a lot of money with it and rely on it to keep my family safe in the winter. If that meter were capable of telling me when the power I used was coming from a peak-load diesel generator, I would happily turn off my electric stuff. But they can't do that now. PV needs to use this window of opportunity to get going, and to get other power-storage solutions working. A Model S is one of those solutions: a gigantic battery with wheels and cruise control. To my way of thinking, systemwide integration is an electropolitical move worth making. From a personal point of view, I can say that Solar City's sales and engineering teams are smarter and more committed than the people at other PV companies I spoke to. They are trying to build a scalable business rather than bopping from town to town installing stuff and moving on. Will this work long term? Who knows? But it's worth trying.
- vadym909 10y ago
  whats PV
  - Snowdax 10y ago
    Photovoltaics. AKA Solar panels
- slouch 10y ago
  PV = Photovoltaics https://en.wikipedia.org/wiki/Photovoltaics https://en.wikipedia.org/wiki/Photovoltaics
Symmetry 10y ago
You can think of a Tesla, to a gross approximation, as a giant battery with some wheels strapped on. Giant batteries are more than anything else crucial to their business and what they spend a lot of time figuring out how to manufacture well. That's why they've gone into the business of selling batteries for temporarily powering homes or letting people store solar energy. And once you're in the business of selling solar storage batteries it makes some sense to integrate with a solar provider. But I think you're right in your second paragraph and it might make more sense for Solar City to just be a re-seller of Tesla batteries without Tesla buying them.
tim333 10y ago
The proposed SolarCity acquisition is probably bad for Tesla shareholders but good for Musk personally as he was the largest shareholder of SolarCity and the deal will kind of bail it out. http://www.bloomberg.com/news/articles/2016-06-21/tesla-announces-offer-to-acquire-rooftop-solar-company-solarcity http://www.bloomberg.com/news/articles/2016-06-21/tesla-anno...

by pdq 10y ago

mtgx 10y ago

I think time will tell if the movement proves "foolish". However, there is one reason why this makes sense. Storage batteries and solar panels will go hand in hand for the vast majority of sales. So it makes sense for Tesla to want to control that half of the "solution" for renewable energy generation.

parasdpain 10y ago

Agreed but I feel Musk is not here to do a business; he is here to fix humanity. Normal logic does not apply on him, just like when he used all his earnings from selling Paypal and decided to start a roket company (SpaceX)! Other enterpreneurs literally laughed at him and called him crazy.

deleted 10y ago
[deleted]
gkya 10y ago
Oh he is the SV Messiah? Honestly enterprise is enterprise. Look what Google have become.
- TeMPOraL 10y ago
  He's not SV Messiah, he seems to be simply the lucky combination of right perspective on the world and enough money to make it happen. The only bad thing about this is that it is so rare. > Honestly enterprise is enterprise. What I like about Tesla and SpaceX is that they're honest, plain companies. They exist as means to an end. Vehicles to achieve material goals - in this case, sustainable transport and making humanity multiplanetary. This is how all companies should work, and yet somehow we got lost on the way and most companies exist to make money, without giving much shit about how exactly they're making this money.
  - gkya 10y ago
    Companies are in the business of selling things for profit. That's essential to them, because they have to pay taxes, create capital and produce, which are all results of commerce. For this they need to maintain an image. And with the first danger to its image, we've seen how Tesla reacted: statistics manipulation and aggression, instead of admitting its their fault and promising to work for better. So we can't bet on companies' honesty, ever. Elon Musk as a person, is a person. A single person. You say that he "seems to be simply the lucky combination of right perspective on the world and enough money to make it happen." According to whom? Interplanetary travel's possibility and practicality is questionable, let alone human chance of extraterrestrial survival. Some may well think that this is a waste of resources. Sustainable transport is nice -- and I love Tesla cars for being seemingly practical non-fossil cars -- but self-driving cars are a big change and actually requires moral adaptations. Would being killed by a self-operating machine equal to being killed by a manual car? Who is to blame if an accident happens? What do I do if my spouse goes under a self-driving car and it is not her fault? Do I sue the car? What happens if it is found guilty (i.e. it's AI is mistaken)? Do we jail the car? Is Tesla to pay me in indemnity? If my self-driving car hits another car's rear bumper, am I liable? Do I recompensate the other driver? Who is liable if an automatic vehicle breaks some traffic rule? What if it passes when it's red? If all cars are electric, how we'll be affected by increased electric demand? This will mean increased CO2 production with geothermal production, and increased nuclear waste to be disposed off with nuclear production. Will we have to build more dams? Will we instead use the same dinosaur oil to to produce electricity, canceling out the gain? We should think on these, and Musk being a SV angel figure is not an answer to these questions. We did not question anything till the end of the past century, and we are at the edge of a climate disaster. This tech (self-driving) means a great, big change to our daily lives, and it cannot happen because someone who "seems to be simply the lucky combination of right perspective on the world and enough money" wanted it to.

maratd 10y ago

> I still don't understand the SolarCity part. People who buy electric cars are far more likely to buy solar panels. And storage batteries. And wiring they would need for the electric car. It's all directly related. So when I buy a Tesla ... I have to hire a 3rd party to install the wiring to charge it. I can buy the storage battery from Tesla, but again, need to hire someone else to install it. And if I want solar panels for that storage battery, again 3rd party. SolarCity has a fleet of professionals ready to do all of that. They also have a plant to manufacture their own panels, which hopefully they'll be able to differentiate on. Combining the two companies will enable Tesla to service that whole loop with the equipment and installation. Now, you can argue that Tesla may have been better off starting their own division from scratch or buying someone else ... but from what I heard, they're getting a hell of a bargain for SolarCity.

snowwrestler 10y ago
> People who buy electric cars are far more likely to buy solar panels. And storage batteries. And wiring they would need for the electric car. It's all directly related. Is this true? I'd be interested in learning more about the data behind this. Anyway, for the sake of discussion let's say it is. Does that mean there is a correlation that scales to the whole population? Or is it just that electric cars and solar panels appeal to the same small segment of the population? That would show a strong correlation, but not scale well.
- maratd 10y ago
  > Or is it just that electric cars and solar panels appeal to the same small segment of the population? That would show a strong correlation, but not scale well. Tesla is a luxury product company. All of their products are either luxury or commercial. Their strategy scales well in that segment.
- ne0n 10y ago
  Generally, having an electric car would push your electric bill into much higher usage tiers where the power is most expensive. Solar panels make the most sense for people who use the most electricity and pay the most for it. I've seen first hand that people who drive electric cars like to talk about clean energy and if they've got solar panels on their roof, it refutes the argument about burning coal to generate the electricity. As solar panels continue to drop in price, it starts to make more sense for the rest of the population, too.

pfranz 10y ago

I thought SolarCity's competitive advantage was solar leasing [1]. Which would mean they're sacrificing upfront profits for longer term gains and any dollar spent now would very likely mean profits in the future. I haven't paid enough attention to see how well that's going. Oh, and I've heard Tesla described as "a battery company that makes cars." Solar is also tightly coupled with battery tech since without it they're a lot less useful. Maybe that's the synergy? [1] https://en.wikipedia.org/wiki/SolarCity#Solar_leasing https://en.wikipedia.org/wiki/SolarCity#Solar_leasing

furyg3 10y ago
Solar leasing is not going to be profitable, very soon. Solar panels (+ installation) is now pretty cheap and getting cheaper. Subsidies are being removed, financing is available. It's becoming a no-brainer. So they're winning there, but this creates a problem. When a significant portion of homes have solar panels, the power companies can no longer act as a free-ish battery for day/night or summer/winter. They will have to massively adjust their pricing... charging solar homes for storage, paying them a crap daily rate, and charging higher rates a night and in the winter. Regulators will be forced to let them do this because otherwise they will go bankrupt. This screws with the solar leasing model. Tesla makes big batteries that happen to have wheels on them, which gives a lot of room to innovate here. They can smooth out the day/night cycle; car/home owners can profit from the low energy price instead of be punished by it (especially if you're uber-ing out your car); used car batteries that aren't ideal for continued usage in cars (say 70% capacity or slower charge/discharge rates) are fine for power smoothing in your basement, etc.

davidz 10y ago

The product isn't solar panels, it's energy. With a huge fleet of electric cars needing to be charged in major metros, where is the electricity coming from? What if you also have a massive deployment of solar panels on top of existing real estate, that you essentially don't have to pay rent for? When Teslas are autonomous, and owners are using them to make money by giving other people rides. How are these cars getting charged? And that energy doesn't come for free. Tesla will have their hand in every piece of transportation.

OliverJones 10y ago

I'm doing business (in my household) with both Tesla and Solar City. I can tell you this about Solar City: They're doing with roofing and power meters what Tesla is doing with vehicles. They're promoting a location-aware distributed electric-distribution grid. We're lucky right now that the government's promotion of PV is putting the burden of power storage on the power-grid operators. Without net metering, this stage of PV would never happen. But net metering is essentially bad for the grid operators; they get paid nothing for storing power or sending it from a net producer to a net consumer. They will eventually prevail like they tried to do in Nevada earlier this year and buy power cheaper than they sell it. But in the meantime the power grid companies haven't got a chance without competition. My home electric meter is as dumb as a box of hammers, even though I spend a lot of money with it and rely on it to keep my family safe in the winter. If that meter were capable of telling me when the power I used was coming from a peak-load diesel generator, I would happily turn off my electric stuff. But they can't do that now. PV needs to use this window of opportunity to get going, and to get other power-storage solutions working. A Model S is one of those solutions: a gigantic battery with wheels and cruise control. To my way of thinking, systemwide integration is an electropolitical move worth making. From a personal point of view, I can say that Solar City's sales and engineering teams are smarter and more committed than the people at other PV companies I spoke to. They are trying to build a scalable business rather than bopping from town to town installing stuff and moving on. Will this work long term? Who knows? But it's worth trying.

vadym909 10y ago
whats PV
- Snowdax 10y ago
  Photovoltaics. AKA Solar panels
slouch 10y ago
PV = Photovoltaics https://en.wikipedia.org/wiki/Photovoltaics https://en.wikipedia.org/wiki/Photovoltaics

Symmetry 10y ago

You can think of a Tesla, to a gross approximation, as a giant battery with some wheels strapped on. Giant batteries are more than anything else crucial to their business and what they spend a lot of time figuring out how to manufacture well. That's why they've gone into the business of selling batteries for temporarily powering homes or letting people store solar energy. And once you're in the business of selling solar storage batteries it makes some sense to integrate with a solar provider. But I think you're right in your second paragraph and it might make more sense for Solar City to just be a re-seller of Tesla batteries without Tesla buying them.

tim333 10y ago

The proposed SolarCity acquisition is probably bad for Tesla shareholders but good for Musk personally as he was the largest shareholder of SolarCity and the deal will kind of bail it out. http://www.bloomberg.com/news/articles/2016-06-21/tesla-announces-offer-to-acquire-rooftop-solar-company-solarcity http://www.bloomberg.com/news/articles/2016-06-21/tesla-anno...