12 ms·

Tesla's solar factory is exporting most of its cells

157 points by SolaceQuantum 7y ago

inflatableDodo 7y ago
>...accompanied a request to produce the cells in a foreign trade zone within the Buffalo plant that would allow Panasonic to import certain parts tariff-free because the finished cells would be sold overseas, not domestically. That request was granted in April. >The zones help companies avoid, delay or pay reduced tariffs on imported parts in cases where it helps U.S. manufacturers compete with overseas rivals. >“It is fully anticipated that the majority of the cells to be produced” in the FTZ “will be exported,” the company said in its application. >Panasonic’s Canal said foreign solar panel manufacturers want the Buffalo plant’s cells because solar panels assembled abroad with American-made cells can be shipped to the United States tariff-free, according to U.S. trade rules implemented last fall. >Panasonic’s Buffalo operation is one of few U.S.-based solar cell producers because it is traditionally far cheaper to make the components in other countries, putting it in a unique position to serve the foreign demand. This is kinda hilarious. Gotta love incentives.
- Klathmon 7y ago
  Wait, so if i'm reading this right the process is: * parts can be imported tariff free into the US to be used to manufacturer cells * cells get exported back out to other countries (to enable the tariff free importing of the parts). * cells are then assembled into a final product over seas * the final product is imported tariff-free due to being manufactured in the US. Is that correct? Because if so that's hilarious and horrifying at the same time!
  - zaroth 7y ago
    Seems like this is the tariffs doing exactly what they're supposed to do -- incentivize US domestic production. > Panasonic’s Canal said foreign solar panel manufacturers want the Buffalo plant’s cells because solar panels assembled abroad with American-made cells can be shipped to the United States tariff-free, according to U.S. trade rules implemented last fall. > Panasonic’s Buffalo operation is one of few U.S.-based solar cell producers because it is traditionally far cheaper to make the components in other countries, putting it in a unique position to serve the foreign demand. They would have to do the assembly into panels domestically as well if they didn't have the exemption due to the cells being US built.
    - magduf 7y ago
      They're incentivizing domestic production, but at two costs: 1) environmental, from shipping stuff around the world several times (parts into the US to SolarCity, cells out of the US to final assemblers, assembled panels back into the US for final sale and use), and 2) cost to domestic purchasers. Finally there's 3) reduced demand for solar panels due to higher costs, which means we don't produce as much power this way, and instead use other means (generally fossil fuel). All in all, it's a terrible deal for us. If we're going to shoot ourselves in the foot on something made abroad, I propose we do it for smartphones. Slap a giant tariff on any cellphone made outside the US, like 1000%. Let's see how Americans like being stuck with their aging smartphones or having to spend $10k for a new one. Oh yeah, make sure the tariff applies to the LCD/OLED screens too, since we can't make those here.
      - icegreentea2 7y ago
        I think there's a fun angle we could take on this. One could reasonably argue that large solar deployment in major industrialize countries is unlikely to occur "in time" without some sort of government prodding (of some sort). And when that time comes, it's gonna be big. We're going to need crank out solar panels and wind turbines like mad. In that context, basically everything we've done so far is basically warm up. Like 2% of US electrical production is from solar. We're gonna need to install like 25-100x the current installation base to do what we want. A reasonable assumption to make is that by the time the USA gets around to doing that, most other rich countries will be doing that too. This means that global supply is going to be challenged. This means that having the domestic capacity to grow this production is key. This means that being somewhat inefficient at this stage to build knowledge-base and competency in key parts of the supply and operations chain may actually be the long-term optimal solution. Of course, this is all just conjecture.
        zaroth 7y ago
        Look at “Swanson’s Law” for insight into solar economics. We’re at the order of magnitude where widespread deployment is inevitable. It took a lot of learning curve to get there, there’s barely another order of magnitude left to be had. There are also the supporting infrastructure that needed to get there, such as battery/storage tech and smarter grids to handle the variable load. Governments around the world have put hundreds of billions of dollars into solar R&D. Last year we had 500GW of solar and 600GW of wind, and added 100GW of solar. We should add more than 100GW of new generation to that this year. It’s pretty good progress! I think global generation is about 15TW, and of course solar doesn’t generate 24/7, so there’s plenty of room to grow.
  - fjsolwmv 7y ago
    Yes. Manufacture is a multi stage operation. Transportation costs (waste) is balanced against production cost at each stage. Tariffs are one (synthetic) aspect of production costs. This may be a hint that the tariff structure is inconsistent, or perhaps it working fine and transportation waste is an acceptable cost. One way to look at is that it's often cheaper to export inputs (cells) for foreign assemble and then reimport the outputs, even if tariffs are not a factor in the location of the inputs. I believe steel or aluminum or oil is similar in that taw materials are mined/extracted somewhere, sent elsewhere for processing, and then finished products sent back. You yourself might have once sent a piece of equipment or repair via mail order, or sent your children away temporarily for education?
  - hef19898 7y ago
    I knew about customs free zones for storage and logistics. That you can do that with manufacturing is news!
  - hef19898 7y ago
    Pretty creative way to subsidize "domestic" manufacturing for sure.
- dalbasal 7y ago
  So... If they imported the same parts and sold locally without first exporting for assembly.. they'd pay tarrifs on the parts? This is funny. Also a reminder that while any given engineering-with-tax policy might make sense, the totality adds up to a mess.
  - username444 7y ago
    The issue here is that goods produced or imported into a FTZ should not qualify as American made or origin. The foreign company should not be able to claim a tax exemption on re-importing to the u.s. The simple solution is to have the manufactured/imported goods in a FTZ not qualify as American made. Because they're not, if they haven't been subject to all America's rules and regulations
    - dalbasal 7y ago
      The "simple* solution would be to not have FTZ, or to not have that tarrif exemption. But... Each of these had their reasons. What you're suggesting is having a made-in-america-but-not-exactly category. It might be the right solution, but it's not a simple one.
      - username444 7y ago
        No, I'm suggesting simply "not made in America". The more I think about this, the more I'm convinced it's bad reporting, or misquoting. As a Canadian that exports, I've been to presentations out on by CBP and cross-border warehousing services that covered FTZ. There's no way something this basic gets past them.
        avar 7y ago
        It's not bad reporting, it's true. This is how "rules of origin" work in general. For an example relevant to Canada pead e.g. what the CETA (EU-Canada) deal has to say about "rules of origin"[1]. For the gory details start reading at page 549 of the full text[2]. Here's an article about how Canadian car manufacturing gets a rebate on raw materials used for exported vehicles[3]. None of this is unusual, having this happen within a FTZ is just a way to speed up the paperwork part of it. You can setup a process where you don't first have to pay tariffs and then seek a rebate, instead you don't pay the tariffs in the first place and the government makes sure the goods are for export. Some of those good then make their way back into the country, at which point you might pay tariffs on them. 1. http://trade.ec.europa.eu/doclib/docs/2017/september/tradoc_156062.pdf http://trade.ec.europa.eu/doclib/docs/2017/september/tradoc_... 2. http://trade.ec.europa.eu/doclib/docs/2014/september/tradoc_152806.pdf http://trade.ec.europa.eu/doclib/docs/2014/september/tradoc_... 3. https://www.reuters.com/article/us-usa-trade-canada-autos/rebates-protect-canadas-auto-industry-from-retaliatory-tariffs-idUSKBN1K60CC https://www.reuters.com/article/us-usa-trade-canada-autos/re...
- pbreit 7y ago
  This article is trying too hard to paint a negative picture. The Solar Roof was never suggested as a cornerstone of Tesla's near-term solar activity. If the Buffalo factory can produce more than Tesla needs I don't see what the problem is selling to others, in the US or out.
pault 7y ago
I actually thought the solar rooftop was really cool when it launched, and if I owned a home I would consider buying it. What happened? It sounds like Tesla intentionally sabotaged it.
- rory096 7y ago
  There's no indication that it's dead, it just launched prematurely (or early to create hype, charitably) before it was ready to scale. Powerwall 1 was similar.
  - dabeeeenster 7y ago
    Powerwall 1 was an actual product that you could buy (even internationally) and worked?!
    - rory096 7y ago
      Was it? I work in an adjacent space now (though didn't back then) and everything I've heard is that Powerwall 1 was vaporware. Even now, Powerwall 2s are hard to come by, though not to nearly the same extent — Tesla uses that product line as a way to soak up excess battery production when its car production bottlenecks, but historically batteries have usually been the long pole. That's essentially the only reason LG Chem/Sonnen/etc have any market share.
      - peteey 7y ago
        >excess battery production Tesla buys batteries from Panasonic. Why would Tesla have excess supply?
        fjsolwmv 7y ago
        No idea if this is true, but Tesla might have a contract for X batteries at Y$ but only end up needing Z<X for its car sales. In every industry it's a good idea to find a use for excess materials.
Maken 7y ago
SolarCity was initially a different Musk project, that ended in bankruptcy and then he made Tesla buy it to cover the losses. This sounds like they are effectively liquidating SolarCity and trying to make the factories profitable (at least for Panasonic).
- perfunctory 7y ago
  Don’t remember SolarCity declaring bankruptcy.
  - RankingMember 7y ago
    It probably would've if it didn't become part of Tesla, but yeah it didn't.
    - nscalf 7y ago
      Do we have any indications of this? Or is this just more wild speculative hate towards Musk?
      - planteen 7y ago
        Many questioned the SolarCity deal from the beginning. It was all over the financial news. There is also a shareholder lawsuit over it. https://tslaq.org/solarcity-lawsuit/ https://tslaq.org/solarcity-lawsuit/ https://www.fool.com/investing/2017/04/20/why-investors-should-have-known-teslas-solarcity-a.aspx https://www.fool.com/investing/2017/04/20/why-investors-shou... "What's becoming increasingly clear about Tesla's buyout of SolarCity is that it was a huge benefit to Musk and his cousins Lyndon and Peter Rive. The three had $100 million of solar bonds issued by SolarCity, bonds that were recently bought back by Tesla. The three will have bonds transfered to Tesla under the same terms, unlike outside investors, but would you rather have a struggling SolarCity owe you $100 million, or market darling Tesla, who has easy access to equity markets? The debt is on top of the 22.2 million SolarCity shares that Musk turned into Tesla shares and the 2.3 million shares the Rives converted. Had SolarCity gone bankrupt, as some major residential solar rivals have done, rather than being bought by Tesla, they would have lost hundreds of millions combined. A bailout of their SolarCity stake to save Musk and the Rives hundreds of millions is worth considering when you see SolarCity's operations being shut down and manufacturing being turned over to Panasonic. At this point, it doesn't look like the SolarCity acquisition was a good deal at all. Musk could prove that wrong eventually, but so far, there's little indication he has much interest in growing solar under Tesla's umbrella."
ckastner 7y ago
> California state data shows 21 Solar Roof systems were connected by the state’s three investor-owned utilities as of Feb. 28. Only a few others were connected in the northeastern United States [...] Amazing that Solar Roof got so much news coverage for what, in the end, amounted to practically nil. I am frequently extremely critical of Elon Musk, but I cannot help but admire his marketing and promotion skills. I believe they are even above Steve Job's. And I'm not being sarcastic, I mean this sincerely. Every other car company needs a huge marketing budget; Tesla has consistently been getting front page press coverage for free, for more than a decade.
- throwayEngineer 7y ago
  Both what Musk and Jobs do, are bad for consumers. Both companies are extremely selective in what they say, and lie about their features, quality and accomplishments. Not every company does this and gets away with it. But Tesla and Apple manage. I wonder what demographic of people are okay with lies. Edit, would someone explain why lying to consumers is a good thing?
  - zaroth 7y ago
    Apple and Tesla are two of the most loved companies in the world by their customers. Tesla actually just won the "Most Loved Brand" rating from Auto Trader [1]. Neither company is perfect, or makes perfect products. Turns out in this world perfect isn't a requirement. Companies can "get away" with failing to deliver 100% of what they promised, when they promised it, if the end result is still delightful. In short, both Apple and Tesla make delightful products. [1] - https://www.teslarati.com/tesla-most-loved-brand-auto-trader-2019-new-car-awards/ https://www.teslarati.com/tesla-most-loved-brand-auto-trader...
    - throwayEngineer 7y ago
      This comment is offtopic. The parent comment is discussing the ethics of lying and that customers accept it.
taneq 7y ago
It's not surprising that solar panels aren't selling so well in the U.S. given how cheap your grid power is. Try paying $0.27/kWh and see how much sense it makes to install some rooftop solar.
- Scoundreller 7y ago
  They pay that in California at peak times. If you can generate power during those peak times instead, and net meter it against your off-peak use, you can do very well.
- mlindner 7y ago
  Solar panels sell pretty good for how low the electricity price is. The main reason for that is that solar energy is a lot better for large portions of the US than it is in Europe. See: https://globalsolaratlas.info/?c=32.518447,-36.524111,3 https://globalsolaratlas.info/?c=32.518447,-36.524111,3 Texas is one of the leading points of growth of Solar at the moment, interestingly, combined with it's low natural gas and fossil fuel cost. The fact that Germany invested a ton in solar is kind of ridiculous compared to how poorly suited they are for it.
- asdff 7y ago
  Sure you save long term but 4 in 10 Americans can't come up with $400 let alone however much this roof will cost. It's a problem of a lack of cash on hand more than electricity costs, solar pays for itself in x amount of years no matter how much you pay per kWh, and in some cases you can sell excess back to the grid. https://www.federalreserve.gov/publications/2018-economic-well-being-of-us-households-in-2017-dealing-with-unexpected-expenses.htm https://www.federalreserve.gov/publications/2018-economic-we...
newnewpdro 7y ago
So Tesla paid $2.6B for SolarCity, but that didn't even include cell manufacturing so they aren't benefitting from this tariff-stimulated demand for foreign export, Panasonic is?
pavon 7y ago
At the time that Tesla and SolarCity merged, the major synergy touted was selling cars, power-walls and solar panels together at the Tesla dealership. They eliminated most of SolarCity's other sales channels like door-to-door sales, and the Home Depot partnership, to focus on sales in the dealerships. Since then their sales have plummeted. Now Tesla is closing most of its dealerships, eliminated the main sales channel SolarCity had remaining. It looks like their plan is to operate with online-only sales, skipping even an in-person estimate visit, and offloading that do the customers. I originally thought that the merger was a really bad deal for Tesla. I didn't realize how bad a deal it would be for SolarCity as well.
Robotbeat 7y ago
This isn't surprising, and it's not exactly the worst outcome, either. We already knew Tesla's solar business was WAY down, even though they (well, Solar City) got incentives for the Buffalo plant. But, since Panasonic can export these cells, the plant is still fairly busy as promised, giving much of the employment benefit that the incentives were promising in spite of the Tesla solar slowdown. That's not a suboptimal result, given the circumstances, IMHO. {And on the other side, Tesla is also not forbidden from using other lithium or solar cells besides the Panasonic ones if it's more convenient for whatever reason (for instance, Tesla often uses non-Panasonic cells in storage applications), so neither party is locked in to a situation that would be detrimental just because the other party can't immediately deliver. That's also good.} I don't understand those who think this is some scandal or funny. The incentives seem to be working (stimulating domestic manufacturing) as designed, even showing to be robust in the face of Tesla's solar downturn (temporary, we hope). What's the issue? Are we just all super jaded now?

157 points by SolaceQuantum 7y ago

>...accompanied a request to produce the cells in a foreign trade zone within the Buffalo plant that would allow Panasonic to import certain parts tariff-free because the finished cells would be sold overseas, not domestically. That request was granted in April. >The zones help companies avoid, delay or pay reduced tariffs on imported parts in cases where it helps U.S. manufacturers compete with overseas rivals. >“It is fully anticipated that the majority of the cells to be produced” in the FTZ “will be exported,” the company said in its application. >Panasonic’s Canal said foreign solar panel manufacturers want the Buffalo plant’s cells because solar panels assembled abroad with American-made cells can be shipped to the United States tariff-free, according to U.S. trade rules implemented last fall. >Panasonic’s Buffalo operation is one of few U.S.-based solar cell producers because it is traditionally far cheaper to make the components in other countries, putting it in a unique position to serve the foreign demand. This is kinda hilarious. Gotta love incentives.

Klathmon 7y ago
Wait, so if i'm reading this right the process is: * parts can be imported tariff free into the US to be used to manufacturer cells * cells get exported back out to other countries (to enable the tariff free importing of the parts). * cells are then assembled into a final product over seas * the final product is imported tariff-free due to being manufactured in the US. Is that correct? Because if so that's hilarious and horrifying at the same time!
- zaroth 7y ago
  Seems like this is the tariffs doing exactly what they're supposed to do -- incentivize US domestic production. > Panasonic’s Canal said foreign solar panel manufacturers want the Buffalo plant’s cells because solar panels assembled abroad with American-made cells can be shipped to the United States tariff-free, according to U.S. trade rules implemented last fall. > Panasonic’s Buffalo operation is one of few U.S.-based solar cell producers because it is traditionally far cheaper to make the components in other countries, putting it in a unique position to serve the foreign demand. They would have to do the assembly into panels domestically as well if they didn't have the exemption due to the cells being US built.
  - magduf 7y ago
    They're incentivizing domestic production, but at two costs: 1) environmental, from shipping stuff around the world several times (parts into the US to SolarCity, cells out of the US to final assemblers, assembled panels back into the US for final sale and use), and 2) cost to domestic purchasers. Finally there's 3) reduced demand for solar panels due to higher costs, which means we don't produce as much power this way, and instead use other means (generally fossil fuel). All in all, it's a terrible deal for us. If we're going to shoot ourselves in the foot on something made abroad, I propose we do it for smartphones. Slap a giant tariff on any cellphone made outside the US, like 1000%. Let's see how Americans like being stuck with their aging smartphones or having to spend $10k for a new one. Oh yeah, make sure the tariff applies to the LCD/OLED screens too, since we can't make those here.
    - icegreentea2 7y ago
      I think there's a fun angle we could take on this. One could reasonably argue that large solar deployment in major industrialize countries is unlikely to occur "in time" without some sort of government prodding (of some sort). And when that time comes, it's gonna be big. We're going to need crank out solar panels and wind turbines like mad. In that context, basically everything we've done so far is basically warm up. Like 2% of US electrical production is from solar. We're gonna need to install like 25-100x the current installation base to do what we want. A reasonable assumption to make is that by the time the USA gets around to doing that, most other rich countries will be doing that too. This means that global supply is going to be challenged. This means that having the domestic capacity to grow this production is key. This means that being somewhat inefficient at this stage to build knowledge-base and competency in key parts of the supply and operations chain may actually be the long-term optimal solution. Of course, this is all just conjecture.
      - zaroth 7y ago
        Look at “Swanson’s Law” for insight into solar economics. We’re at the order of magnitude where widespread deployment is inevitable. It took a lot of learning curve to get there, there’s barely another order of magnitude left to be had. There are also the supporting infrastructure that needed to get there, such as battery/storage tech and smarter grids to handle the variable load. Governments around the world have put hundreds of billions of dollars into solar R&D. Last year we had 500GW of solar and 600GW of wind, and added 100GW of solar. We should add more than 100GW of new generation to that this year. It’s pretty good progress! I think global generation is about 15TW, and of course solar doesn’t generate 24/7, so there’s plenty of room to grow.
- fjsolwmv 7y ago
  Yes. Manufacture is a multi stage operation. Transportation costs (waste) is balanced against production cost at each stage. Tariffs are one (synthetic) aspect of production costs. This may be a hint that the tariff structure is inconsistent, or perhaps it working fine and transportation waste is an acceptable cost. One way to look at is that it's often cheaper to export inputs (cells) for foreign assemble and then reimport the outputs, even if tariffs are not a factor in the location of the inputs. I believe steel or aluminum or oil is similar in that taw materials are mined/extracted somewhere, sent elsewhere for processing, and then finished products sent back. You yourself might have once sent a piece of equipment or repair via mail order, or sent your children away temporarily for education?
- hef19898 7y ago
  I knew about customs free zones for storage and logistics. That you can do that with manufacturing is news!
- hef19898 7y ago
  Pretty creative way to subsidize "domestic" manufacturing for sure.
dalbasal 7y ago
So... If they imported the same parts and sold locally without first exporting for assembly.. they'd pay tarrifs on the parts? This is funny. Also a reminder that while any given engineering-with-tax policy might make sense, the totality adds up to a mess.
- username444 7y ago
  The issue here is that goods produced or imported into a FTZ should not qualify as American made or origin. The foreign company should not be able to claim a tax exemption on re-importing to the u.s. The simple solution is to have the manufactured/imported goods in a FTZ not qualify as American made. Because they're not, if they haven't been subject to all America's rules and regulations
  - dalbasal 7y ago
    The "simple* solution would be to not have FTZ, or to not have that tarrif exemption. But... Each of these had their reasons. What you're suggesting is having a made-in-america-but-not-exactly category. It might be the right solution, but it's not a simple one.
    - username444 7y ago
      No, I'm suggesting simply "not made in America". The more I think about this, the more I'm convinced it's bad reporting, or misquoting. As a Canadian that exports, I've been to presentations out on by CBP and cross-border warehousing services that covered FTZ. There's no way something this basic gets past them.
      - avar 7y ago
        It's not bad reporting, it's true. This is how "rules of origin" work in general. For an example relevant to Canada pead e.g. what the CETA (EU-Canada) deal has to say about "rules of origin"[1]. For the gory details start reading at page 549 of the full text[2]. Here's an article about how Canadian car manufacturing gets a rebate on raw materials used for exported vehicles[3]. None of this is unusual, having this happen within a FTZ is just a way to speed up the paperwork part of it. You can setup a process where you don't first have to pay tariffs and then seek a rebate, instead you don't pay the tariffs in the first place and the government makes sure the goods are for export. Some of those good then make their way back into the country, at which point you might pay tariffs on them. 1. http://trade.ec.europa.eu/doclib/docs/2017/september/tradoc_156062.pdf http://trade.ec.europa.eu/doclib/docs/2017/september/tradoc_... 2. http://trade.ec.europa.eu/doclib/docs/2014/september/tradoc_152806.pdf http://trade.ec.europa.eu/doclib/docs/2014/september/tradoc_... 3. https://www.reuters.com/article/us-usa-trade-canada-autos/rebates-protect-canadas-auto-industry-from-retaliatory-tariffs-idUSKBN1K60CC https://www.reuters.com/article/us-usa-trade-canada-autos/re...
pbreit 7y ago
This article is trying too hard to paint a negative picture. The Solar Roof was never suggested as a cornerstone of Tesla's near-term solar activity. If the Buffalo factory can produce more than Tesla needs I don't see what the problem is selling to others, in the US or out.

pault 7y ago

I actually thought the solar rooftop was really cool when it launched, and if I owned a home I would consider buying it. What happened? It sounds like Tesla intentionally sabotaged it.

rory096 7y ago
There's no indication that it's dead, it just launched prematurely (or early to create hype, charitably) before it was ready to scale. Powerwall 1 was similar.
- dabeeeenster 7y ago
  Powerwall 1 was an actual product that you could buy (even internationally) and worked?!
  - rory096 7y ago
    Was it? I work in an adjacent space now (though didn't back then) and everything I've heard is that Powerwall 1 was vaporware. Even now, Powerwall 2s are hard to come by, though not to nearly the same extent — Tesla uses that product line as a way to soak up excess battery production when its car production bottlenecks, but historically batteries have usually been the long pole. That's essentially the only reason LG Chem/Sonnen/etc have any market share.
    - peteey 7y ago
      >excess battery production Tesla buys batteries from Panasonic. Why would Tesla have excess supply?
      - fjsolwmv 7y ago
        No idea if this is true, but Tesla might have a contract for X batteries at Y$ but only end up needing Z<X for its car sales. In every industry it's a good idea to find a use for excess materials.

Maken 7y ago

SolarCity was initially a different Musk project, that ended in bankruptcy and then he made Tesla buy it to cover the losses. This sounds like they are effectively liquidating SolarCity and trying to make the factories profitable (at least for Panasonic).

perfunctory 7y ago
Don’t remember SolarCity declaring bankruptcy.
- RankingMember 7y ago
  It probably would've if it didn't become part of Tesla, but yeah it didn't.
  - nscalf 7y ago
    Do we have any indications of this? Or is this just more wild speculative hate towards Musk?
    - planteen 7y ago
      Many questioned the SolarCity deal from the beginning. It was all over the financial news. There is also a shareholder lawsuit over it. https://tslaq.org/solarcity-lawsuit/ https://tslaq.org/solarcity-lawsuit/ https://www.fool.com/investing/2017/04/20/why-investors-should-have-known-teslas-solarcity-a.aspx https://www.fool.com/investing/2017/04/20/why-investors-shou... "What's becoming increasingly clear about Tesla's buyout of SolarCity is that it was a huge benefit to Musk and his cousins Lyndon and Peter Rive. The three had $100 million of solar bonds issued by SolarCity, bonds that were recently bought back by Tesla. The three will have bonds transfered to Tesla under the same terms, unlike outside investors, but would you rather have a struggling SolarCity owe you $100 million, or market darling Tesla, who has easy access to equity markets? The debt is on top of the 22.2 million SolarCity shares that Musk turned into Tesla shares and the 2.3 million shares the Rives converted. Had SolarCity gone bankrupt, as some major residential solar rivals have done, rather than being bought by Tesla, they would have lost hundreds of millions combined. A bailout of their SolarCity stake to save Musk and the Rives hundreds of millions is worth considering when you see SolarCity's operations being shut down and manufacturing being turned over to Panasonic. At this point, it doesn't look like the SolarCity acquisition was a good deal at all. Musk could prove that wrong eventually, but so far, there's little indication he has much interest in growing solar under Tesla's umbrella."

ckastner 7y ago

> California state data shows 21 Solar Roof systems were connected by the state’s three investor-owned utilities as of Feb. 28. Only a few others were connected in the northeastern United States [...] Amazing that Solar Roof got so much news coverage for what, in the end, amounted to practically nil. I am frequently extremely critical of Elon Musk, but I cannot help but admire his marketing and promotion skills. I believe they are even above Steve Job's. And I'm not being sarcastic, I mean this sincerely. Every other car company needs a huge marketing budget; Tesla has consistently been getting front page press coverage for free, for more than a decade.

throwayEngineer 7y ago
Both what Musk and Jobs do, are bad for consumers. Both companies are extremely selective in what they say, and lie about their features, quality and accomplishments. Not every company does this and gets away with it. But Tesla and Apple manage. I wonder what demographic of people are okay with lies. Edit, would someone explain why lying to consumers is a good thing?
- zaroth 7y ago
  Apple and Tesla are two of the most loved companies in the world by their customers. Tesla actually just won the "Most Loved Brand" rating from Auto Trader [1]. Neither company is perfect, or makes perfect products. Turns out in this world perfect isn't a requirement. Companies can "get away" with failing to deliver 100% of what they promised, when they promised it, if the end result is still delightful. In short, both Apple and Tesla make delightful products. [1] - https://www.teslarati.com/tesla-most-loved-brand-auto-trader-2019-new-car-awards/ https://www.teslarati.com/tesla-most-loved-brand-auto-trader...
  - throwayEngineer 7y ago
    This comment is offtopic. The parent comment is discussing the ethics of lying and that customers accept it.

taneq 7y ago

It's not surprising that solar panels aren't selling so well in the U.S. given how cheap your grid power is. Try paying $0.27/kWh and see how much sense it makes to install some rooftop solar.

Scoundreller 7y ago
They pay that in California at peak times. If you can generate power during those peak times instead, and net meter it against your off-peak use, you can do very well.
mlindner 7y ago
Solar panels sell pretty good for how low the electricity price is. The main reason for that is that solar energy is a lot better for large portions of the US than it is in Europe. See: https://globalsolaratlas.info/?c=32.518447,-36.524111,3 https://globalsolaratlas.info/?c=32.518447,-36.524111,3 Texas is one of the leading points of growth of Solar at the moment, interestingly, combined with it's low natural gas and fossil fuel cost. The fact that Germany invested a ton in solar is kind of ridiculous compared to how poorly suited they are for it.
asdff 7y ago
Sure you save long term but 4 in 10 Americans can't come up with $400 let alone however much this roof will cost. It's a problem of a lack of cash on hand more than electricity costs, solar pays for itself in x amount of years no matter how much you pay per kWh, and in some cases you can sell excess back to the grid. https://www.federalreserve.gov/publications/2018-economic-well-being-of-us-households-in-2017-dealing-with-unexpected-expenses.htm https://www.federalreserve.gov/publications/2018-economic-we...

newnewpdro 7y ago

So Tesla paid $2.6B for SolarCity, but that didn't even include cell manufacturing so they aren't benefitting from this tariff-stimulated demand for foreign export, Panasonic is?

pavon 7y ago

At the time that Tesla and SolarCity merged, the major synergy touted was selling cars, power-walls and solar panels together at the Tesla dealership. They eliminated most of SolarCity's other sales channels like door-to-door sales, and the Home Depot partnership, to focus on sales in the dealerships. Since then their sales have plummeted. Now Tesla is closing most of its dealerships, eliminated the main sales channel SolarCity had remaining. It looks like their plan is to operate with online-only sales, skipping even an in-person estimate visit, and offloading that do the customers. I originally thought that the merger was a really bad deal for Tesla. I didn't realize how bad a deal it would be for SolarCity as well.

Robotbeat 7y ago

This isn't surprising, and it's not exactly the worst outcome, either. We already knew Tesla's solar business was WAY down, even though they (well, Solar City) got incentives for the Buffalo plant. But, since Panasonic can export these cells, the plant is still fairly busy as promised, giving much of the employment benefit that the incentives were promising in spite of the Tesla solar slowdown. That's not a suboptimal result, given the circumstances, IMHO. {And on the other side, Tesla is also not forbidden from using other lithium or solar cells besides the Panasonic ones if it's more convenient for whatever reason (for instance, Tesla often uses non-Panasonic cells in storage applications), so neither party is locked in to a situation that would be detrimental just because the other party can't immediately deliver. That's also good.} I don't understand those who think this is some scandal or funny. The incentives seem to be working (stimulating domestic manufacturing) as designed, even showing to be robust in the face of Tesla's solar downturn (temporary, we hope). What's the issue? Are we just all super jaded now?