Elon Musk blames Tesla Energy's troubles on the Model 3 and the pandemic
Elon Muskappeared in court Monday to defend Tesla's 2016 acquisition of SolarCity.
- Musk said Tesla's solar
energydivision underperformed because it had focused on Model 3production.
- After the Model 3 went to market, Musk said the solar division ran up against the pandemic.
Elon Musk has said that Tesla's solar energy division hasn't taken off because his company had to focus on getting the Model 3 to market, and then ran "headlong" into the pandemic.
The Tesla CEO made the comments Monday at the Delaware Court of Chancery, where he's defending 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 business. It was absorbed into Tesla and became
Musk told the court Monday he blamed Tesla Energy's failure to live up to expectations on Tesla diverting its resources to focus on getting its Model 3 to market, according to the AP and the Washington Post. Per the AP, Musk said the Model 3 became an "all hands on deck" effort.
Tesla's Model 3 production ramp was notoriously difficult, particularly over 2017 and 2018 when Musk described the process as"production hell."
After that, Musk said, Tesla Energy ran "headlong into a pandemic." Per the Washington Post's Will Oremus, who was present at the trial, Musk insisted that Tesla Energy would take off as the pandemic eases - although the lawyer cross-examining Musk said he had failed to keep promises.
The court case is expected to last for two weeks. If Musk loses he could be liable for $2.6 billion.
Tesla Energy has lost market share since the 2016 acquisition. When Tesla bought SolarCity it was the top installer of solar panels in the US, but in 2019 it fell into third place behind Sunrun and Vivint Solar.
In April, Tesla raised prices for its flagship Solar Roof product. Customers who had already signed contracts had their prices jacked up by more than 100%. One customer whose roof went from $71,000 to $146,000 filed a class-action lawsuit against Tesla.
During Tesla's Q2 earnings call in April, Musk said the company had made "significant mistakes" 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@example.com or firstname.lastname@example.org. If you are an employee always use a non-work email.
- Virat Kohli, Shikhar Dhawan, Suresh Raina and more — Indian players with most runs in IPL history
- Supreme Court to pronounce order next week on pleas seeking independent probe into Pegasus snooping row
- KPIT Technologies to acquire Future Mobility Solutions for ₹135 crore
- IndiGo bullish on festive season, may see demand reach pre-COVID levels in December
- Air conditioner brands Voltas, Blue Star, Havells rally ahead of festive season