Elon Musk Gambled Tesla to Save SolarCity • Hacker News Board

Re: Elon Musk Gambled Tesla to Save SolarCity

#181

Post by [deleted] » Mon, Aug 26, 2019, 10:09 PM UTC

edoloughlin wrote: post #178

btilly wrote: post #98

Earlier quoted context omitted.

SpaceX's stated goal is "occupy Mars". Being able to land and deploy solar panels at scale is essential to this goal. And Musk has learned the hard way not to trust third party suppliers that he doesn't control. SpaceX's aspirational goal is to launch something Mars-wards in the 2022 window to identify where the base will be and have some resources. Then send several vehicles and a few people in 2025 to set up a miss…

SpaceX's stated goal is "occupy Mars". Being able to land and deploy solar panels at scale is essential to this goal. And Musk has learned the hard way not to trust third party suppliers that he doesn't control That gave me the best laugh I've had all day. Bravo! Is SolarCity going to send installers to Mars in Teslas launched on top of a Falcon Heavy?

[deleted]

Re: Elon Musk Gambled Tesla to Save SolarCity

#182

Post by kjksf » Mon, Aug 26, 2019, 10:16 PM UTC

Animats wrote: post #161

There are real "solar shingles", but not from Tesla/Solar City.[1] The big player is CertainTeed, which makes roof components. CertainTeed is for real; you can order those. The strange thing is CertainTeed makes both regular and solar shingles, but don't offer a matching set. DeSol has a product line of roof components, with solar, non-solar, and edge parts that all fit together. Theirs looks good, but may be vaporwa…

Even a cursory look at the photographs in https://www.solarpowerworldonline.com/2019/04/the-latest-on-... makes it clear that CetainTeed's shingles are nothing like Tesla's Solar Roof.

Tesla's Solar Roof is a roof and has a single look. It looks like a roof, not a solar panel installation.

CertainTeed is clearly an add-on. Maybe less ugly than regular solar panels but you can see that solar tiles are different than the rest of the roof.

DeSol is less obvious but also have the "solar panel" look.

The innovation in Tesla's product is that you can't tell it from a regular roof.

Maybe the reason such product didn't take off yet is because no-one did it well enough.

It remains to be seen if Tesla's product will be successful but it's clearly a unique offering at the moment.

Re: Elon Musk Gambled Tesla to Save SolarCity

#183

Post by gamblor956 » Mon, Aug 26, 2019, 10:16 PM UTC

kjksf wrote: post #179

gamblor956 wrote: post #130

Earlier quoted context omitted.

It took them two years to set up a department that sells their first product (besides gas and electricity): an outdated EV charger, from a company they bought that stopped innovating after acquisition and is now lagging behind competition. Not a car, just the charger. Two years to set up the business structure isn't that much time in the scheme of multinational conglomerates. Especially when the market isn't yet that…

> On a separate note, SolarCity stopped innovating after it was acquired You're conflating innovation with sales. SolarCity was a financing business more than they were a product company. They were selling financing of solar generation via Power Purchase Agreements. Installation and equipment manufacturing was largely outsourced. That was a business model innovation and for a while it worked splendidly, which is why…

Techies really like to knock down financial innovation as if technological development was the only thing that mattered. Must explain why Betamax and HDDVD won the home media wars.

SolarCity's innovation was the financing model. It was adopted by the rest of the solar panel industry. The problem was that they fucked up the investment side and paid for this business model with expensive debt instead of cheap capital.

They are also working on Solar Roof - another huge innovation with great potential.

https://arstechnica.com/science/2018/10/five-solar-roof-shin...

Tesla/SolarCity was never the first, or even the frontrunner, when it comes to developing solar shingles. Just the ones who spoke the loudest and retroactively declared themselves the inventors of a product they haven't yet successfully made and that has been in development by the rest of the solar panel industry for a few decades.

Re: Elon Musk Gambled Tesla to Save SolarCity

#184

Post by vkou » Mon, Aug 26, 2019, 10:18 PM UTC

btilly wrote: post #155

vkou wrote: post #132

Earlier quoted context omitted.

And he chose to do this by lending money at way-below-market rates to a financial dumpster fire of a company that didn't, and still doesn't have any capacity or secret technical expertise to manufacture one component of his Mars plans, which are still decades in the future? All the while, knowing that the financials of SolarCity are worse then he publiclly claimed? Pardon me, but given the personal financial gain he…

Keep your companies straight. The bonds that SpaceX bought both helped the company stay afloat, and were at above market rates. And SpaceX made money off of that. SpaceX's involvement made sense, both tentatively (in the hope that SpaceX would get technology that they want down the road) and immediately (financial returns). The deal worked out well for SpaceX. Though it didn't pan out for their eventual hopes down th…

SolarCity paid SpaceX 4.4% on those bonds, when they couldn't find any non-insider takers for a 6.5% yield.

4.4% on a junk bond is not 'above market rates'. It's a sweetheart deal.

> And SpaceX made money off of that.

1. In finance, ignore counterparty and default risk at your own peril. 2. Only because Elon then took the money of Tesla shareholders to buy SolarCity. If the purchase didn't go through, those bonds would have been about as valuable as toilet paper.

> in the hope that SpaceX would get technology that they want down the road

These were bonds, not tech licenses. It was propping up a business that may at some point in the future, license tech that hasn't been invented yet at better terms than any competitors in the solar space, who are not bogged down with a financial rock, and an entirely irrelevant residential-panel-financing business about their neck.

> Tesla is the company that really sank money in.

Yes, they ended up eating the worst of his self-serving trades. Despite a happy outcome of SpaceX, it was still not responsible of him to have invested SpaceX money into his own failed side venture.

> Their synergy made more sense, Tesla has a lot of expertise in batteries and solar panels + batteries is a great combination.

Ford has a lot of expertise with ICE engines, yet for some reason, it's not been trying to become a gasoline company... But sure, as much as I think there's no synergy between a failing firm that is specializing in financial engineering, and an auto manufacturer (And hindsight confirms this - SolarCity is, years later, nothing but a drain on Tesla's balance sheets), I do agree that, bad as it is, it's still a better case that SpaceX / SolarCity.

Re: Elon Musk Gambled Tesla to Save SolarCity

#185

Post by mikeash » Mon, Aug 26, 2019, 10:22 PM UTC

ryanhuff wrote: post #90

mikeash wrote: post #73

Earlier quoted context omitted.

Yeah, I’ve visited a couple dozen Supercharger locations and never seen solar either. I think the main purpose of the batteries is just to cut down on demand charges. Even a smallish older Supercharger can pull 500kW if a bunch of cars arrive at once, and that gets pricey. I wouldn’t be surprised if they got fancier as you describe, though. If the capability is there, might as well use it.

Solar at latest Supercharger in Las Vegas: https://electrek.co/2019/07/18/tesla-v3-supercharger-station...

There are definitely a few! It’s just not the norm.

Re: Elon Musk Gambled Tesla to Save SolarCity

#186

Post by asdfk-12 » Mon, Aug 26, 2019, 10:24 PM UTC

pwinnski wrote: post #111

WheelsAtLarge wrote: post #7

Earlier quoted context omitted.

Hyperloop seems to be a great way to move materials. Transporting goods thru a specialized system and getting them out of the highways would help a lot. But it's mostly wishful thinking. BTW, it was Peter Thiel that lead Paypal thru the rough times. Musk was a part of it but he was kicked out before you could say that Paypal was a success.

Transporting goods via a purpose-dedicated system via fixed points without using highways would be great. And it is! America's use of trains to move goods around this country is amazing. Come to think of it, moving people efficiently is a largely-solved problem given sufficient population density. Hyperloop is just dumb.

If you are referring to urban areas - what about the crippled subway system and insane traffic congestion in NYC?

Re: Elon Musk Gambled Tesla to Save SolarCity

#187

Post by dragontamer » Mon, Aug 26, 2019, 10:27 PM UTC

xkjkls wrote: post #176

dragontamer wrote: post #45

Earlier quoted context omitted.

> The purchase of SolarCity by Tesla was the single dumbest thing Elon Musk did Why was it a bad move for Elon Musk? Elon Musk owned many SolarCity shares (in fact, Elon Musk was the chairman of SolarCity). If SolarCity would go bankrupt, Elon Musk would have lost a lot of money and power. Elon Musk saved SolarCity to save his own skin and money. Its not really that hard to imagine. Now Tesla shareholders, who overwh…

> Now Tesla shareholders, who overwhelmingly voted for the merger, made a big mistake. But Tesla shareholders own the company, they are allowed to make whatever decisions they want. They voted for the merger based on Musk's claim that SolarCity had a good financial position and that they were releasing a revolutionary solar shingle product. Both of those were wrong.

Note: the financial positioning of SolarCity was obvious to anyone who could read a 10k. SolarCity never made a profit, and it spent tons of money chasing imaginary products (similar to a lot of other Musk-based properties). 10k documents exist for a reason. https://www.sec.gov/Archives/edgar/data/1408356/000156459017...

In 2016, SolarCity lost a full, solid, $Billion. The Tesla investors who voted for SolarCity / Tesla merger has no excuse on this part: all information was public, and no fraud has been detected in any of these numbers (yet).

> and that they were releasing a revolutionary solar shingle product

That one... I'll blame Musk for for sure. But investors really should have done their own proper leg-work and analyzed SolarCity's financial position on their own.

Re: Elon Musk Gambled Tesla to Save SolarCity

#188

Post by JumpCrisscross » Mon, Aug 26, 2019, 10:27 PM UTC

gamblor956 wrote: post #140

btilly wrote: post #98

Earlier quoted context omitted.

SpaceX's stated goal is "occupy Mars". Being able to land and deploy solar panels at scale is essential to this goal. And Musk has learned the hard way not to trust third party suppliers that he doesn't control. SpaceX's aspirational goal is to launch something Mars-wards in the 2022 window to identify where the base will be and have some resources. Then send several vehicles and a few people in 2025 to set up a miss…

And if he succeeds, the Mars colony could come to be worth more to SpaceX than its satellite launch business. By a lot. While the concept of settling Mars is understandable from an academic perspective, what is the economic justification for claiming that Mars is valuable? Any Martian colony would require hundreds of billions of Earth investment just to become habitable for a few dozen people and there aren't any res…

> what is the economic justification for claiming that Mars is valuable?

In all likelihood, it will be intellectual property. Putting people who have taken a risk to go to a new world (literally) in tight proximity with a shared goal is a proven path for innovation. The lack of many Earth-based restrictions boosts that tendency.

Re: Elon Musk Gambled Tesla to Save SolarCity

#189

Post by pbreit » Mon, Aug 26, 2019, 10:44 PM UTC

spiderfarmer wrote: post #102

For all the negativity here about Musk and his business decisions, there is something to be said for integrating transport and energy services in one great package. I consult for a large energy conglomerate that wants to get into this market from the energy suppliers side, but the problem is that they are completely clueless when it comes to expanding beyond their traditional business. In their vision, they'll supply…

If Tesla can get China factory open, the Y launched and some more stable financial ground, I do believe Elon & Tesla will indeed work on the residential solar business in earnest and that it is a reasonable Tesla product offering.

Re: Elon Musk Gambled Tesla to Save SolarCity

#190

Post by pbreit » Mon, Aug 26, 2019, 10:48 PM UTC

docker_up wrote: post #18

The purchase of SolarCity by Tesla was the single dumbest thing Elon Musk did and it has dire consequences for Tesla the car company. Shareholders definitely have a great chance to sue Musk because he did not do this in the best interest of his shareholders, it's in the best interest of his cousin. Co-mingling all parts of his companies (SpaceX buying SolarCity Bonds) is a huge red flag that reeks of corporate malfea…

Following your suggestion would be terrible for Tesla investors. Elon is demonstrating quite profoundly that he does not allow things to die. That is probably the main thing keeping TSLA at a $40b market cap with upside potential.