Elon Musk, Tesla Find Unlikely Problem In Solar Power Venture

SolarCity was founded in July 2006 by brothers Lyndon Rive and Peter Rive based on a suggestion for a solar company concept by their cousin, Elon Musk. It has been the leading provider of residential solar power in California since 2007, serving hundreds of thousands of customers across 19 states. It was listed as the number 2 overall solar installation company in the U.S. by Solar Power World magazine in 2013 according to GTM Research.

Way back in 2016, Musk, electric car maker Tesla’s CEO, announced his planned solar roof product days after he revealed his plans to merge Tesla with SolarCity, one of America's largest solar power providers. The problem was that Tesla never managed to manufacture or install the solar roof before. In the same year, Tesla acquired SolarCity for $2.6 billion and started to change the management and strategies. Since then, Tesla started to face unlikely challenges.

Based on the latest ranking from Wood Mackenzie Power & Renewables, from 2013 to 2016, SolarCity has been the leading U.S. residential solar installer. Figures show that SolarCity was the consistent top company for four years. However, in 2017, after merging with Tesla, SolarCity’s share of residential capacity started to drop.

Per a Bloomberg report, Sunrun started to overtake SolarCity’s shares in 2018. The year 2019 is the worst year so far for SolarCity as it recorded its greatest decline of shares, ranking third behind Sunrun and Vivint solar who are subsequent to it before. The figures clearly show that SolarCity started to struggle with a decline of shares after merging with Tesla.

Last November 2018, Tesla faced another major problem after its solar panels allegedly caused a fire to seven retail stores of Walmart. The Walmart suit, filed in the state of New York, alleged that “as of November 2018, no fewer than seven Walmart stores had experienced fires due to Tesla’s solar systems including the four fires and three others that had occurred earlier.” Evacuations, damaged property and inventory were included in the filing. Tesla’s stock dropped more than 1 percent after hours on the news.

The infrastructure that built the original SolarCity is gone, and new products have been struggling to win shares after the merge and several controversies. Can you think of the right move Tesla and Musk should do? Can Tesla still have any way to recover from these problems and decline?