Tesla CEO Elon Musk acquired SolarCity five years ago for $2.6 billion. At that time, to convince shareholders to agree to the deal, Elon Musk threw a splashy event in Hollywood, where he raised a shiny shingle roof, which he referred to as mini solar panels.
However, the polemic continued after it was discovered that SolarCity was founded by Musk's cousins, Peter and Lyndon Rive in 2006. The company was also supported by Musk who served as chairman of the board at Tesla and SolarCity. Musk's space exploration company, SpaceX, has also purchased tens of millions of dollars worth of solar bonds from SolarCity.
“The goal is that solar roofs look better than regular roofs, generate electricity, last longer, have better insulation, and actually have a cheaper installation cost than regular roofs plus electricity costs. Why did you buy another one?” Musk said at the event in October 2016.
Launching CNBC International in Jakarta, Thursday (7/10/21) Musk believes that a roof with solar panels will be a big thing in every housing. Once Tesla and SolarCity are combined, the products will enhance the company's growth by providing clean energy to homeowners.
However, after the deal was reached, new installations by Tesla-SolarCity plummeted. In the fourth quarter of 2017, Tesla reported a 43% drop in solar power deployments compared to when it purchased SolarCity.
The company eventually lost its position as market leader in 2018 and is now in about 2% of the residential solar market, according to Wood Mackenzie . In the first and second quarters of 2021, Tesla installed 92 and 85 megawatts of solar, respectively, which is even less than half that SolarCity installed per quarter prior to the acquisition.
After that, Tesla transferred several SolarCity employees to work on building the company's electric cars and batteries, but some were fired by him, and several others were transferred to work on repairs.
The problem continued. Some of the solar roofs installed by the company caught fire. An employee who raised fire safety issues internally and filed a whistleblower complaint with a federal government office sued Tesla.
Shareholders also sued Tesla, saying the acquisition was a bailout for Musk and his other family businesses.
Meanwhile, Musk testified that the SolarCity deal was critical to achieving Tesla's vision. He denied SolarCity was in dire financial straits before Tesla acquired the business.