Tesla’s stock (TSLA) took a big hit this morning while the rest of the market was up and it comes as a lawsuit brings more scrutiny to the SolarCity acquisition and Elon Musk’s involvement. Expand Expanding Close
SolarCity was once, without a doubt, the leading name in residential solar power in the United States. Solar leasing was 72% of residential installations in 2014 – and the largest lessor, SolarCity, had a 34% market share of all solar installed, leased and sold. The second largest company, Vivint, was less than half their size.
Tesla has made its first quarterly announcement since it purchased SolarCity in late 2016. Understandably, it seems SolarCity’s own Gigafactory has been renamed Gigafactory 2. The SolarCity integration being an ongoing process warranted notice in the header lines of the document – with this first page quote reiterating the logic in purchasing SolarCity:
With the acquisition of SolarCity, we have created the world’s only integrated sustainable energy company, from generation to storage to transportation.
Multiple references were made to bettering the cash positions of the company by focusing solar power sales on cash deals that generate immediate revenue versus lease sales. It was stressed that Tesla’s plan to do this was strongly underway – cash sales increased from Q3’16 to Q4’16 from 13% to 28%, while from increasing 7X from the 4% in Q4’15. Of the 203MW installed in the quarter – 56MW were cash sales totaling $77 million. Those $77M were added in only six weeks – $500-667M in cash sales for 2017 (low end adjusted as there is always a bump in 3rd/4th quarter)?
The critics of the Tesla-SolarCity merger were concerned of the solar company putting a strain on Tesla’s cash balance, but after the acquisition, CEO Elon Musk surprisingly said that he expects the company to contribute to its cash instead. Today, the company announced that it raised $241 million equity from its solar portfolio in a solar cash equity transaction with Sammons Renewable Energy (SRE). Expand Expanding Close
Beyond Tesla and Panasonic’s collaborations in battery manufacturing at the Gigafactory in Nevada and solar cell manufacturing at the factory in Buffalo, the two companies reportedly struck a deal this week for Panasonic to manufacture complete solar panels for Tesla. The contract is reportedly significant enough that Panasonic is reopening its idled solar module factory in Osaka, Japan. Expand Expanding Close
In the 3rd quarter of 2016, the United States installed 4,143 MW of solar power per a report released by Greentech Media’s Research Team – 191% greater than Q3’15. This volume represents the largest quarter in US history, even larger than the historically largest 4th quarters during the prior decade. Q1+Q2+Q3 of 2016 have already surpassed all of 2015’s total install amount. The 4th quarter is expected to be even larger – leading to 2016 overall being 88% greater than 2015. It looks like Americans installing solar power and the Department of Energy are turning their nose up to Donald Trump’s Chinese Hoax.
The production plans for Tesla’s newly acquired solar panel factory in Buffalo through its acquisition of SolarCity are not entirely clear. There are a lot of cards at play. Tesla and Panasonic are now going to get involved in SolarCity’s manufacturing of solar cells and solar modules, while the plant will now also produce Tesla’s new solar roof products.
But it’s clear that SolarCity is moving forward with production at the plant since the company has started the process of hiring production workers this week. Expand Expanding Close
In this model, Tesla owns the solar power system and takes all incentives, then sells the homeowner discounted electricity in a 20-year contract. With a population greater than 20 million people, the third largest state is a ripe opportunity – and maybe a laboratory.
Despite its “Sunshine State” nickname, Florida ranks among the lowest states for solar power deployment thanks to anti-solar regulations backed by local electric utilities. But on election day, the citizens of Florida showed interest in solar energy by rejecting the anti-solar Amendment 1, which according to solar installers, including SolarCity, would have made it easier for utilities to add fees to make solar more expensive forcustomers.
Following the election, Tesla’s SolarCity is the latest solar installer announcing an expansion in Florida today now that it will become economically viable for a lot more households to install solar arrays on their homes. Expand Expanding Close
While Tesla’s management and CEO Elon Musk are often quick to remind everyone that the company is still very much operating like a startup with limited resources, it has been growing significantly over the past few years and especially recently with its two acquisitions over the last month: SolarCity and Grohmann Engineering.
Tesla has now over 30,000 employees, including more than 25,000 based in the US. Expand Expanding Close
We’re pleased to announce that Tesla’s acquisition of SolarCity closed this morning.
It wasn’t necessarily an easy process. Wall Street analysts almost universally didn’t like the deal and Tesla’s share price suffered the consequences, but now that it is closed, what’s next for the new combined company? Expand Expanding Close
Tesla is currently holding its special shareholders meeting to vote on the merger and General Counsel Todd Maron announced within minutes of the meeting starting that shareholders have approved the merger by more than 85%.
The company officially acquired SolarCity for roughly $2 billion. Tesla will integrate SolarCity’s team and operations, and it will phase out its brand in favor of ‘Tesla Energy’ over the next few months.
Tesla’s CEO recently mentioned that the combination of energy storage and solar energy will enable developing nations to leapfrog the fossil fuel era and go directly to renewable energy.
The comment is particularly interesting if you consider that through its acquisition of SolarCity, Tesla is acquiring shares in a company that is trying to attempt exactly what Musk was describing. Expand Expanding Close
In this week’s top stories: A first look at Tesla Model S’ Model 3-like Glass Roof and Autopilot in the wild, plans for ‘Gigafactory 2’ emerge, automakers lobby Trump, the latest solar news, and much more.
Today, SolarCity reported its financial results for its third quarter 2016 and last quarter before its merger with Tesla if approved during a special meeting of shareholders scheduled for next week. The company confirmed having installed 187 MW of solar capacity during the quarter – bringing the total since inception to 2.45 GW spread out across over 300,000 solar customers. Expand Expanding Close
One of the many reasons CEO Elon Musk gave to justify the merger of Tesla and SolarCity is to simplify the complicated bidding process that comes with the two companies collaborating on utility-scale solar and energy storage projects.
The timing of the merger might have to do with several of these projects being in the pipeline since a SolarCity official just confirmed that they are “in talks for ‘a number of large installations” big enough to double the current installed capacity by the company. Expand Expanding Close
While discussing potential improvements in manufacturing efficiency with Tesla investor Ron Baron at his conference in New York today, Tesla CEO Elon Musk said that under Tesla and with the new partnership with Panasonic, SolarCity’s “solar Gigafactory” in Buffalo (pictured above) could produce up to 10 GW/year of solar products – up from the previous 1 GW/year of planned production. Expand Expanding Close