Elon Musk says ‘significant mistakes’ were made
https://www.theverge.com/2021/4/30/2...omer-reactions
Gene Frakes, an electrician and skydiving instructor who lives outside of Rockford, IL, became a Tesla Energy customer after watching a video of snow effortlessly sliding off one of the company’s new solar roofs. It was just the proof he was looking for that Tesla’s innovative glass roof tiles with embedded solar cells would work just as well in snowy climates as they do in sunnier parts of the country like California.
“That was impressive,” Frakes, 50, told The Verge.
But his excitement quickly faded after he received an email from Tesla informing him that the original estimate for the 10.58kW project would be increasing to $53,649 from $34,743 —
a 54 percent jump.
“It seems so incorrect that I could hardly believe it,” Frakes said.
Frakes wasn’t the only one left sun-kissed by Tesla’s massive price increase. In early April, notices started going out to customers awaiting installation of their Tesla solar roofs that their prices would be going up, sometimes by as much as 100 percent. The Verge spoke to 11 Tesla solar roof customers around the country who have canceled or are considering canceling their orders. They are commiserating with each other in chat groups, airing their grievances online, and launching petitions to raise awareness about the issue. Some are even considering filing a class action lawsuit against Musk’s company.
It would later be revealed that the company had underestimated the complexity of some of the roofs. Tesla CEO Elon Musk admitted as much in an earnings call on April 26th, saying that the company had made “significant mistakes” in how it calculates the installation costs. Tesla tried to soften the blow by offering some aggrieved customers free Powerwall home batteries if they renewed their orders.
But it may not work. Even before the price increases, solar roof customers were filing lawsuits claiming Tesla had destroyed their credit rating by reporting loans they never requested. The price increases are the latest self-inflicted wound that has caused Tesla’s once vaunted solar business, which it originally acquired in 2015, to lose market share as more companies get involved and the price of solar drops nationwide.
In early March, everything was going well for Amr Kader, an OB-GYN from East Greenwich, RI, and his solar roof project. He’d taken out two loans and started paying down the premium. And he had received the necessary permits from his utility company and the local township. Kader, who also owns a Tesla Model Y, was excited about adding another Tesla product to his lifestyle.
But days before the project was set to begin, he received word from Tesla that it would be rescheduled for late April. After that, he was told his project would be delayed indefinitely due to the company’s inability to secure an installation crew in Rhode Island. After some back-and-forth, Tesla informed Kader that it would also be raising his price by $3,000, or 30 percent.
Kader was incensed. He filed a complaint with the state attorney general’s consumer division, accusing Tesla of “abandonment of contract, extortion and deliberate misguidance and misinformation.” He also has been talking to a lawyer about filing a lawsuit against the company, and hopes to see Tesla’s license suspended or revoked in his state.
As for his own order, Kader’s initial reaction was to dig in his heels. “I did not cancel my signed contract and made it clear I am not canceling,” he said. But ultimately he decided it wasn’t worth the effort and informed Tesla he wouldn’t be moving forward with the project. And he began shopping around for other, cheaper solar roof products.
“Honestly, I wouldn’t trust them installing my roof even if they would honor the original contract,” he said. But the Model Y in his driveway serves as a constant reminder of the whole debacle.
“It definitely made me feel not proud any more of riding my Tesla car,” Kader admitted.
Tesla’s solar ambitions date back to 2015, when it acquired SolarCity, a company owned by Musk’s cousin. A year later, Musk unveiled the solar roof on the former set of Desperate Housewives, claiming that the roofs would look “as good or better” than conventional roofs.
But almost from the beginning, the deal proved to be a thorn in Musk’s side. Critics called it a “bailout” of the struggling SolarCity, which had piled up massive amounts of debt over the years. A number of Tesla shareholders sued Musk over the deal, alleging he overvalued SolarCity and did not properly recuse himself from the deal. Tesla’s board of directors settled the suit last year without Musk, leaving the CEO the lone defendant in the case.
It’s also seen its share of the market slip. Tesla has fallen far behind Sunrun, which is the largest installer of solar panels in the US. It’s so far behind, Wall Street analysts barely pay attention to the company’s reports on its energy division, Wedbush’s Dan Ives said.
“The Street doesn’t really assign a value to Tesla’s solar business,” Ives said, “because it’s relatively unproven thus far.”
“It’s been choppy to say the least,” Ives added, “since Tesla has really focused on solar the last few years. It’s between competition, pricing, and execution issues. I think they’ve gotten some upward momentum over the last nine to 12 months, but it’s definitely been more of a black eye on the overall Tesla story.”
