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Tesla To Close a Dozen Solar Facilities In 9 States (cnbc.com)
An anonymous reader quotes a report from CNBC: Electric car maker Tesla's move last week to cut 9 percent of its workforce will sharply downsize the residential solar business it bought two years ago in a controversial $2.6 billion deal, according to three internal company documents and seven current and former Tesla solar employees. The latest cuts to the division that was once SolarCity -- a sales and installation company founded by two cousins of Tesla CEO Elon Musk -- include closing about a dozen installation facilities, according to internal company documents, and ending a retail partnership with Home Depot that the current and former employees said generated about half of its sales. About 60 installation facilities remain open, according to an internal company list reviewed by Reuters. An internal company email named 14 facilities slated for closure, but the other list included only 13 of those locations.
It's not just restructuring to be more efficient, it's simple - Trump put a huge tariff on Solar Panel imports. That means it's much harder to make a profit being an installer now.
This is quite literally Trump's trade war in action.
What century were you born? The only thing we have that is more energy efficient than a battery is a capacitor. Batteries are in the 90+% range. Efficiency isn't the complaint about batteries. It's the weight and that's mostly it. Even the general grid is more inefficient.
A battery that can smooth out the energy demand of the grid over a week would be far more efficient than turning off and on on-demand inefficient plants. Of course at this time, on a macro level, a massive battery is a very very expensive investment. And that is the problem with batteries.
But the nice thing about batteries is that they can be scaled down while maintaining most of their efficiency. You can build a distributed network of batteries that are co-connected with the variances in demand; shielding the general grid from some of that variance. That way the general grid can run more efficiently.
50% of revenue with very low profit isn’t something to cry over.
The problem is essentially that SolarCity had a very high customer acquisition cost by using Home Depot ($7,500 from reports, as opposed to an average $4,000). That cost, even at the lower end, is simply too high unless the customer is spending $40k+.
By doing more to vertically integrate and leverage the high traffic Tesla stores, they do more to improve their brand. They can also switch more to a wholesale model where the battery division really shines.
As an investor, my only concern with this is making sure they can maintain access to the “Home Depot crowd” without a presence there.