Elon Musk says Tesla Powerwall production lagging due to chip shortage

Date:

KEY POINTS
Tesla CEO Elon Musk revealed that demand for the company’s Powerwall is as high as 80,000 units but that Tesla will not be able to produce even half of that this quarter.

Thank you for reading this post, don't forget to subscribe!

Musk said Tesla will only be able to make 30,000 to 35,000 of its home batteries in a best case scenario for the period ending in September 2021, blaming the expected shortfall on chip shortages.

The CEO discussed Tesla’s Powerwall numbers during his testimony in a Delaware court on Monday where he testified about his role in Tesla’s 2016 acquisition of SolarCity.

Tesla CEO Elon Musk revealed in court on Monday that demand for Tesla Powerwalls stands around 80,000 units, but the company won’t be able to make even half of that many this quarter.

In the “best case,” Musk said, Tesla will produce 30,000 to 35,000 of its home backup batteries in the current quarter. He blamed the expected shortfall on chip shortages.

Musk was testifying in Delaware Chancery court when he revealed the latest Powerwall guidance on Monday. He was there to defend his role in Tesla’s 2016 acquisition of SolarCity, the solar installer, for around $2.6 billion.

Shareholders have sued Tesla alleging that Musk pushed for the SolarCity deal, was improperly involved when he should have been fully recused, and acted in his own best interests rather than Tesla shareholders’ best interests at the time.

WATCH NOW
VIDEO02:03
Elon Musk’s second day in court — What to watch for
In addition to spending around $2.6 billion to acquire it, Tesla took on SolarCity’s billions in debt and other liabilities and obligations. Personal entanglements between the two companies abounded. For example, Musk’s first cousins Lyndon and Peter Rive founded and ran SolarCity, and Musk was a chairman of the board at both businesses concurrently.

The shareholders suing Musk also believe he was not as transparent as he should have been with all of Tesla’s voting shareholders about various aspects of the deal, including the financial health of SolarCity, and investments in its solar bonds by SpaceX, another Musk-led venture.

Powerwalls announced year before SolarCity deal

In May 2015, more than a full year before acquiring SolarCity, Tesla launched its Energy business with an event to show off its Powerwall and larger energy storage products. Musk touted the idea of running Tesla’s electric cars on clean, abundant solar power, making them even more sustainable.

He pitched the energy storage systems as a way to make renewable energy more reliable, storing solar energy generated during the day for use at night, for example. During the presentation Musk pointed to Powerwalls mounted flat on a wall at the back of the auditorium.

The batteries could allow home owners to live off the grid entirely, or at least avoid interruptions from blackouts. “It’s designed to work very well with solar systems right out of the box,” he said, without specifying a certain brand of panels.

He said that Powerwalls would be available in three to four months.

In court this week, Musk told a different story, claiming that the Powerwalls would not have been possible to build without acquiring SolarCity.

In an exchange Monday, shareholders’ attorneys asked Musk if he thought June 2016 “was not the best time for Tesla to be embarking on a $2 billion acquisition of a financially troubled company.”

Musk said, “I don’t think that SolarCity was financially troubled.”

The attorneys then rephrased their question saying, “It wasn’t a good time to buy any company, much less a financially troubled company. Correct?”

Musk replied, “Actually, not correct. We were beginning development of the Tesla Powerwall battery. And in order to have a compelling product, you really needed to have a tightly integrated solar and battery solution. And we could not create a well-integrated product if SolarCity was a separate company.”

The court will need to determine whether Musk effectively controlled the Tesla board and forced a SolarCity deal to happen, or whether shareholders and the board made that decision independently, based on all the information the CEO was obligated to share.

Meanwhile, Tesla is still trying to make its solar business run profitably and smoothly.

The company reported $494 million in energy revenue in the first quarter of 2021, an improvement from $293 million during the first quarter of the pandemic year, but its first-quarter cost of revenue reached $595 million.

Tesla does not disclose the breakdown between its solar and energy storage products, or its solar and energy products for homes and larger scale projects like its Megapack in Australia.

Tesla’s much larger autos business generated $9 billion in revenue during the first quarter of 2021.

In the first quarter of 2021, Tesla suddenly increased prices for its solar installations, and made it a requirement for customers ordering solar panels or “Solarglass” roof tiles to also order the Powerwall.

During a first-quarter earnings call, Musk said:

“There’s only one configuration. We will not sell a house solar without a Powerwall. That solar could either be solar retrofit with conventional panels put on the roof, or it can be the Tesla Solar Glass Roof, but in all cases, it will have the Powerwall.”

After those price hikes, which affected some Tesla solar customers retroactively, Tesla is also facing proposed class action lawsuits in California and Pennsylvania from unhappy customers who had already lined up financing and made changes to their homes to prepare for Tesla solar installations.

Share post:

Subscribe

Popular

More like this
Related

Soldiers Massacre: “Defense Headquarters Reveals Identities of Fallen heroes in Okuoma Community Attack”

The Defense Headquarters has revealed the identities of the...

US warned Niger about ties to Russia, Iran before junta revoked accord, Pentagon says

WASHINGTON, March 18 (Reuters) - U.S. officials traveled to...

“Potential Trump Presidency: Concerns Rise Over US-Africa Relations”

If Donald Trump secures victory in November's US presidential...

“Sanwo-Olu, Anyaoku, Adebanjo, and Others Call for New Nigerian Constitution”

SANWO-OLU, ANYAOKU, ADEBANJO, OTHERS DEMAND NEW NIGERIAN CONSTITUTION ...

Discover more from Naija247news

Subscribe now to keep reading and get access to the full archive.

Continue reading