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Quite interesting, particularly considering Elons name is there. Elon was quite adamant in talking about SolarCity that they concentrate on the consumer-facing

Quite interesting, particularly considering Elons name is there. Elon was quite adamant in talking about SolarCity that they concentrate on the consumer-facing business, not producing solar cells, which as he explained is just slightly refined pure silicon with connectors slapped on, very much a commodity business where state actors like China are essentially subsidizing the West for buying solar panels in a bid to crush solar panel competition. So he didn't want to get into that. Maybe, as with the Gigafactory, he sees an opportunity here. Here is Elon saying making solar panels is a bad idea: https://www.youtube.com/watch?v=AHHwXUm3iIg#t=2960 https://www.youtube.com/watch?v=AHHwXUm3iIg#t=2960

jccooper 12y ago
True. And yet, it's also a very Elon move: vertical integration, making a big bet on growth, and doing so domestically in spite of theoretically lower-cost foreign production. (You can see all those factors in Tesla and SpaceX.) Perhaps the Silveo technology convinced him that solar cells are not always commodity. And then he went with his usual instinct.
- trhway 12y ago
  in vertically integrated business, even 2 times difference in the price of some basic parts/materials may not matter if that is just a fraction of the total price of the resulting product/service. If you own the high margin exit point like installation of the solar systems, you may be more worried about quality and the performance of the parts, stability of supply, etc... - the factors which can significantly affect your downstream high-margin part of the pipeline. Add to that that Musk is going to own battery component of the solar systems as well.
tls 12y ago
It's been recently reported that China will not be able to side step tariffs anymore. http://www.reuters.com/article/2014/06/04/us-usa-trade-solar-idUSKBN0EF08A20140604 http://www.reuters.com/article/2014/06/04/us-usa-trade-solar...
marcell 12y ago
He isn't saying making solar panels is a bad idea. Rather, he is pointing out that, at the time of the interview, solar adoption in the US was limited by installation capacity, not production and management capacity. SolarCity has been working very hard an effectively on installing and managing rooftop solar systems, so it is possible that they are not limited on the production side, or that they have enough volume on the installation side to justify vertical integration.

jccooper 12y ago

True. And yet, it's also a very Elon move: vertical integration, making a big bet on growth, and doing so domestically in spite of theoretically lower-cost foreign production. (You can see all those factors in Tesla and SpaceX.) Perhaps the Silveo technology convinced him that solar cells are not always commodity. And then he went with his usual instinct.

trhway 12y ago
in vertically integrated business, even 2 times difference in the price of some basic parts/materials may not matter if that is just a fraction of the total price of the resulting product/service. If you own the high margin exit point like installation of the solar systems, you may be more worried about quality and the performance of the parts, stability of supply, etc... - the factors which can significantly affect your downstream high-margin part of the pipeline. Add to that that Musk is going to own battery component of the solar systems as well.

tls 12y ago

It's been recently reported that China will not be able to side step tariffs anymore. http://www.reuters.com/article/2014/06/04/us-usa-trade-solar-idUSKBN0EF08A20140604 http://www.reuters.com/article/2014/06/04/us-usa-trade-solar...

marcell 12y ago

He isn't saying making solar panels is a bad idea. Rather, he is pointing out that, at the time of the interview, solar adoption in the US was limited by installation capacity, not production and management capacity. SolarCity has been working very hard an effectively on installing and managing rooftop solar systems, so it is possible that they are not limited on the production side, or that they have enough volume on the installation side to justify vertical integration.