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When You're here (NASDAQ: TSLA) bought SolarCity for $ 2.6 billion in 2016, it was supposed to create an energy plant capable of driving the future of renewable energy. People could buy solar, energy storage and an electric vehicle under one roof and have a fully integrated energy solution. Cut the links of the grid could not be far.
Less than three years after the completion of the acquisition, the solar sector of Tesla is a shell and continues to lose ground. And it seems that solar energy continues to be an afterthought as Tesla tries to stabilize its vehicle business.
Source of the image: Tesla.
Tesla's winding solar sales strategy
When Elon Musk announced at the end of February that Tesla would close most of its stores (which was later reversed), it shocked the observers of the auto sector, but that should have been even more shocking to the side. of energy. business. One of the arguments put forward by Musk for the purchase of SolarCity was that it could transfer sales to Tesla showrooms and couple more auto sales to solar storage. and energy storage, exploiting the ecosystem of products and retail infrastructure to increase sales and reduce costs. To this end, Tesla ended home sales which accounted for most of SolarCity's sales and transferred solar energy into some exhibition halls. The strategy has not been successful so far, with solar installations falling like a rock, but Musk has continued to claim that solar will eventually turn the corner and that the exhibition halls are the key of solar growth.
When announcing fourth quarter results in 2018, Musk said:
In the fourth quarter, we deployed solar retrofit systems of 73 MW, a sequential decrease of 21%. We are still transitioning from our old partner sales network to our Tesla stores and training our sales team to selling solar systems in addition to vehicles.
Less than a month later, this argument was gone when the store closures were announced, even though they never happened. Tesla clearly has no strategy for selling solar power, and it has become an afterthought for the company.
What is Tesla doing in the world with energy?
Tesla could be one of the most innovative companies in the energy sector if it worked hard. The company owns a large solar power plant in Buffalo, New York (reports indicate that they are largely unused), as well as innovative products such as the solar roof and Powerwall. But it does not have much success with either product on the market and it does not have a clear sales or manufacturing strategy.
As Tesla struggles, more concentrated competitors like SunRun and SunPower expand their capabilities and increase their market share in the United States. Both now have their own energy storage products coupled with solar systems, which Tesla has announced plans to do with SolarCity.
Tesla has never been an energy company
Although Tesla and SolarCity have been able to combine, Tesla has never really taken the energy seriously. When things went bad, the auto sector has always been winning, which makes growth and innovation in a sector as competitive as that of solar energy difficult.
At the end of the day, Tesla's winding energy strategy will probably be what will condemn his solar activity. The retail solar energy was the future just a few months ago, but it has not been clearly replaced. How are workers or customers supposed to take Tesla Energy seriously when Tesla does not seem to take solar energy seriously? This is a question Elon Musk must answer before considering spending tens of thousands of dollars to install Tesla's energy products at home and, given Tesla's solar decline, other customers have the same reservations. .
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