Elon Musk attributes Tesla Energy’s problems to Model 3 and pandemic

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Elon Musk said Tesla’s solar power division was sparked by the production of the Model 3 and then the pandemic. REUTERS / Michele Tantussi / File Photo

Elon Musk appeared in court on Monday to defend Tesla’s acquisition of SolarCity in 2016.

Musk said Tesla’s solar power division underperformed because it focused on producing the Model 3.

After the Model 3 was brought to market, Musk said the solar division hit the pandemic.

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Elon Musk said Tesla’s solar power division did not take off because his company needed to focus on bringing the Model 3 to market, then rushed “headlong” into the pandemic.

The CEO of Tesla made the comments Monday in the Delaware Court of Chancellery, where he defends Tesla’s acquisition of solar panel company SolarCity in 2016.

SolarCity was founded by Musk’s cousins ​​and Musk had a 22% stake in the company. It was absorbed by Tesla and became Tesla Energy. The lawsuit was brought by shareholders who claim the deal amounted to a backdoor bailout of SolarCity.

Musk told the court on Monday that he blamed Tesla Energy’s inability to meet expectations because Tesla was diverting resources to focus on marketing its Model 3, according to the AP and the Washington Post. According to the AP, Musk said the Model 3 has become an “everyone on deck” effort.

Tesla’s Model 3 production ramp was notoriously difficult, particularly in 2017 and 2018, when Musk described the process as “production hell.”

Read more: Tesla and real estate giant Brookfield are building Austin neighborhood filled with renewable energy technology

After that, Musk said, Tesla Energy “rushed headlong into a pandemic.” According to The Washington Post’s Will Oremus, who was present at the trial, Musk insisted Tesla Energy would take off as the pandemic abated – although the lawyer who cross-examined Musk said he didn’t. had not kept his promises.

The trial is expected to last two weeks. If Musk loses, he could be held responsible for $ 2.6 billion.

Tesla Energy has lost market share since the acquisition in 2016. When Tesla bought SolarCity, it was the leading solar panel installer in the United States, but in 2019 it fell to third place behind Sunrun and Vivint Solar.

The story continues

In April, Tesla raised the prices of its flagship Solar Roof. Customers who had already signed contracts saw their prices increase by more than 100%. A customer whose roof has gone from $ 71,000 to $ 146,000 has filed a class action lawsuit against Tesla.

During Tesla’s second quarter earnings call in April, Musk said the company made “significant mistakes” in calculating the cost of the solar roof.

Do you work at Tesla Energy or are you a Tesla Energy customer? Contact this reporter at [email protected] or [email protected]. If you are an employee, always use unprofessional email.

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