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What Tesla Should Actually Do (and become profitable)

What Tesla Should Actually Do (and become profitable)


So let's get this out there right away, yes I am the CEO of a competing national solar company, yes Elon is way wealthier than me, and.....yes Solarcity has done a great job creating this industry (sort of). However, Solarcity's model is and always has been flawed, deeply flawed. It is no secret to anyone in this industry, and if they had to remain a private company there is no chance they would have lasted nearly this long before being rescued by Tesla. Hell, even Solarcity employees can admit this, and have.

As to why Tesla which has a ridiculous cash burn and will need to consistently raise cash and continue to dilute shareholders with another few billion dollars in share selling, purchased a total financial loser like Solarcity there is only one reason. Pride. When the acquisition was announced the Tesla shareholders spoke and the stock dropped a huge amount. A clear indication that they didn't want to purchase a perennial financial loser. Happen to notice the timing of the announcement for "Solar Shingles" was merely a few weeks before the vote?

Did you happen to notice they will now not be doing Solar Shingles until further notice? If you are shocked then you have not paid attention. Elon has missed the majority of his predictions and numbers, consistently. Sure they are the biggest but really who cares when you have to keep asking other people to pay your bills for you? How can you sell a nice and trusting 40 something couple in the Midwest that worked hard for their money over a long history to have solar put on their pride and joy home and tell them "We are the biggest" but not tell them "We could very well be bankrupt soon because we cannot make payroll unless someone lends it to us"? Come. On.

Let's be totally honest in the eyes of the American hard working people here. The same Solarcity that was / is under investigation by the U.S. Treasury and is now under investigation by the U.S. SEC was never designed to be profitable.

Now if you know the company you are the CEO of may need to raise cash again but then you take massive preferred shares, and not just a few hundred, try to tell someone in the upstate New York that this makes sense but also tell them that if the shareholders don't vote for Tesla to acquire it we may have to close our doors. Tell them what happens to their array and their contract. Now who has the "no lien" but secretly most attorneys will tell you a UCC filing is ownership and is in fact a lien synonym. The best thing Tesla can do as a company is keep the leases they already have from SCTY and just admit they cannot sell or install a solar array for nearly what some of us other national installers can. If you could, you would. If you could have, you wouldn't have gone public and had to deal with the SEC which is now really biting them in the ass.

We know why they did. Only two reasons a company goes public. The founders want to cash out or the company needs money. Just ask the Mars family. Back to the point, after keeping the lease revenues from SCTY, they should then do a massive layoff of their installers, stop doing installs, stop sales and installs and keep on some maintenance personnel. This will cut their massive overhead and also their outrageous CAC. This would actually put Tesla on a much faster track to profitability. I don't know the details of what would happen in Upstate NY with the state granting funds to help build their new facility. Perhaps they could have a revenue sharing partnership with Panasonic on producing modules. In all honesty Panasonic doesn't actually need Solarcity one bit. In fact Elon should step down, he IS an exceptional idea man, but a poor financial operator of other people's money. (Not his own we have noticed however)

If it wasn't for Peter Thiel we may have never heard of Elon. In the last two months alone he is busy working on a neuro-link company and now a tunnel boring company among a rocket scientist and playing with trains in tubes. If he focused on one company for the next 36 months and one company only he might actually make it. Let's face it, if you cannot turn a profit or even compete price wise when you own your own module plant, AND acquired your own racking company AND have the buying power to purchase straight from Solaredge in massive quantities but other national installers CAN without these advantages, can you really say you are the best? Stick with the ideas Mr Musk because buying solar modules and roofing shingles at a car dealership still is a terrible execution.
  • #elon musk
  • #solarcity
  • #solar wolf
  • #tesla
Ted "The Wolf" Strzelecki
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