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Elon Musk Gambled Tesla to Save SolarCity

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Re: Elon Musk Gambled Tesla to Save SolarCity

#31

Post by patagonia »

jacquesm wrote: post #24
patagonia wrote: post #17

Earlier quoted context omitted.

A company that was founded based on his suggestion, with his financial and leadership support. He was there from day zero. Solar City is not just a solar cell company. It is a power generation and distribution company. Which clearly ties into charging electric cars. Another (very) common early criticism of Tesla: You’re just filling up with coal power. And. Risky for sure. Elon Musk obviously doesn’t shy from risky.…

There is a huge difference between risky and dumb. If you create different legal entities then you do so for a reason: to ensure that if one tanks it doesn't bring the rest down. Tying them back together in this way risks all of the companies with none of the benefits of having them all under one legal entity. Besides that it opens you up to minority shareholder lawsuits that have a very high probability of sticking.…

“Dumb”. Is that a financial term? Or a legal term? Perhaps we are able to benefit from hindsight? I’m just saying that, calling vertical integration by a company that doesn’t have widespread industry support and is moving very fast and needs to control as many of the required moving parts as possible, calling that corruption, nepotism, fraud, and dumb,,, not a balanced argument.

Re: Elon Musk Gambled Tesla to Save SolarCity

#32

Post by kmonsen »

mrfredward wrote: post #26
patagonia wrote: post #17

Earlier quoted context omitted.

A company that was founded based on his suggestion, with his financial and leadership support. He was there from day zero. Solar City is not just a solar cell company. It is a power generation and distribution company. Which clearly ties into charging electric cars. Another (very) common early criticism of Tesla: You’re just filling up with coal power. And. Risky for sure. Elon Musk obviously doesn’t shy from risky.…

>A company that was founded based on his suggestion, with his financial and leadership support. He was there from day zero. And that's part of the huge conflict of interests being discussed here. The process didn't start with Tesla execs saying "hmm, we should acquire a solar company, let's look at a dozen potential targets and see which one is the best fit." It started with SolarCity needing a bailout and Musk findi…

There was a step in between, SolarCity was in trouble so they issued SolarBonds. Musk and some of his companies, notably SpaceX, decided to buy these since there were not enough interest.

So this final buyout was not to save SolarCity, but to save Musk and his companies that had previously rescued SolarCity.

Re: Elon Musk Gambled Tesla to Save SolarCity

#33

Post by jacquesm »

patagonia wrote: post #31
jacquesm wrote: post #24

Earlier quoted context omitted.

There is a huge difference between risky and dumb. If you create different legal entities then you do so for a reason: to ensure that if one tanks it doesn't bring the rest down. Tying them back together in this way risks all of the companies with none of the benefits of having them all under one legal entity. Besides that it opens you up to minority shareholder lawsuits that have a very high probability of sticking.…

“Dumb”. Is that a financial term? Or a legal term? Perhaps we are able to benefit from hindsight? I’m just saying that, calling vertical integration by a company that doesn’t have widespread industry support and is moving very fast and needs to control as many of the required moving parts as possible, calling that corruption, nepotism, fraud, and dumb,,, not a balanced argument.

There were plenty of people calling it dumb when it happened.

Re: Elon Musk Gambled Tesla to Save SolarCity

#34

Post by pretendscholar »

patagonia wrote: post #11

Damned if Elon does. Damned if he don’t. “An electric vehicle is worthless without electric charging stations.” So Tesla makes a risky move to save one such company that happens to provide an answer to that criticism. People pile on. Predictably.

What does this have to do with charging stations? What percentage of his "Supercharger" network is powered with solar panels? Why does Tesla have to provide the charger networks personally? Why would Tesla have have to undertake residential solar installations to install them at the charger stations? Imagine if you could only fill up your tank at your auto manufacturer's station. Musk's central problem is his hero complex and delusions of grandeur. His ego requires that he gets as close as possible to producing the future^tm by his own hand.

Re: Elon Musk Gambled Tesla to Save SolarCity

#35

Post by patagonia »

jacquesm wrote: post #33
patagonia wrote: post #31

Earlier quoted context omitted.

“Dumb”. Is that a financial term? Or a legal term? Perhaps we are able to benefit from hindsight? I’m just saying that, calling vertical integration by a company that doesn’t have widespread industry support and is moving very fast and needs to control as many of the required moving parts as possible, calling that corruption, nepotism, fraud, and dumb,,, not a balanced argument.

There were plenty of people calling it dumb when it happened.

Oh, my bad. Didn’t know that. I guess that settles it.

Re: Elon Musk Gambled Tesla to Save SolarCity

#36

Post by martythemaniak »

Well, Tesla is one long stream of gambles. You dont get to school an established, global, trillion dollar industry without taking risks.

The only notable thing here is that hating on Musk is really popular these days. So the failed gambles (this, falcon doors, the initial overautomation of the Model 3 production, etc) will be highlighted and mocked, while the successful gambles will go unmentioned or incorporated as a matter-of-fact developments.

Running Tesla stories through a selection bias filter is really useful, as it'll discard most stories that pop up.

Re: Elon Musk Gambled Tesla to Save SolarCity

#37

Post by danso »

patagonia wrote: post #17
kmonsen wrote: post #14

Earlier quoted context omitted.

Risky move to save a company run by Elon's cousin. edit , also Solarcity didn't/doesn't provide charging capabilities, but solar cells. There is not a lack of solar cell companies in the world and SolarCity was never particularly advanced.

A company that was founded based on his suggestion, with his financial and leadership support. He was there from day zero. Solar City is not just a solar cell company. It is a power generation and distribution company. Which clearly ties into charging electric cars. Another (very) common early criticism of Tesla: You’re just filling up with coal power. And. Risky for sure. Elon Musk obviously doesn’t shy from risky.…

> And. Risky for sure. Elon Musk obviously doesn’t shy from risky. He sets goals that solve existential problems. In this case, our reliance on fossil fuels.

What is the relevance of these platitudes? Are they intended to be a catchall explanation/excuse for every time Musk makes an objectively terrible business decision? That we have to consider Musk cares so much about ending fossil fuels and factor that into the criticism? Musk (at least based on his Twitter persona) doesn't seem to be the type to buy into the mindset of "the most important thing is that you cared", so I don't think it's ultimately respectful to him to moderate criticism based on his announced ideals.

I'll accept the premise that Elon Musk is special, that he, as you say, "sets goals that solve existential problems." What facts/assertions in the posted article reflect or are a consequence of his higher thinking? What existential-problem-solving goal does Musk have that gives us confidence him paying $5B for SolarCity and assuming $3B of debt is a shrewd, deliberate move, and not the inexplicable clusterfuck we would happily label it were it done by some other company?

The posted story focuses almost exclusively on SolarCity's solar panel production, and makes no mention of it being a "power generation and distribution company". Did the reporter deliberately omit mentioning it, because they want to focus on SolarCity's failures? I googled around for SolarCity and power generation and/or distribution, and I only skimmed the first pages of results, but I didn't see a headline post-2017 that didn't describe something negative, e.g. `Tesla to close a dozen solar facilities in 9 states`. Is it possible that SolarCity no longer meaningfully competes in power generation/distribution?

Re: Elon Musk Gambled Tesla to Save SolarCity

#38

Post by AstralStorm »

smacktoward wrote: post #9

This bit seems pretty damning: > As SolarCity struggled to raise money from institutional investors, it began offering individuals a chance to buy what it called Solar Bonds. (“Now you can get paid while driving the solar revolution,” the marketing material said.) But there were few takers—so other parts of the Musk empire took up the slack. According to the shareholder lawsuit, SpaceX acquired $255 million of the bo…

Only in a deal to furnish sats and rockets with solar panels forever. Vertical integration more or less.

Re: Elon Musk Gambled Tesla to Save SolarCity

#39

Post by [deleted] »

martythemaniak wrote: post #36

Well, Tesla is one long stream of gambles. You dont get to school an established, global, trillion dollar industry without taking risks. The only notable thing here is that hating on Musk is really popular these days. So the failed gambles (this, falcon doors, the initial overautomation of the Model 3 production, etc) will be highlighted and mocked, while the successful gambles will go unmentioned or incorporated as…

[deleted]

Re: Elon Musk Gambled Tesla to Save SolarCity

#40

Post by patagonia »

jacquesm wrote: post #27
patagonia wrote: post #11

Damned if Elon does. Damned if he don’t. “An electric vehicle is worthless without electric charging stations.” So Tesla makes a risky move to save one such company that happens to provide an answer to that criticism. People pile on. Predictably.

She's got you covered: "Musk’s believers argue that the details of his ventures don’t matter: It’s the grand vision that counts. “The guy has a will to make stuff happen that is extraordinary,” says someone who worked closely with Musk. “He willed Tesla to happen. And in willing a reality into existence, he might not stick to the facts.”"

This answers my comment how? Please see below comment regarding vertical integration. I would never argue that “Elon related company X” will succeed because Elon. Honestly a lot of vitriol in these comments. I’m out.
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