solar roof is dead on arrival - yet another reason why tesla\'s merger with solarcity makes no sense

by:JinYi     2020-03-30
Tesla (NASDAQ:TSLA)
In an unusual presentation on Friday night, organize a press conference to discuss new products that the company will launch in partnership with SolarCity (SCTY).
At the end of the presentation, no details on cost, performance or any other specifications were found --
Besides that, the Sun tile looks beautiful.
According to the company, the product will not be available until next summer.
Since the alleged availability is nearly a year away and there are no specifications available, why is the product going to be released now? Don\'t make a mistake.
The solar roof is a dog and pony show that sells Tesla\'s merger with SolarCity to fans and investors.
Despite the lack of detail, the information disclosed is sufficient to conclude that this product has nowhere to go.
First of all, we need to point out that Sun tile is not a new concept.
Google image search will show many different solar tiles, including some beautiful options.
However, none of these products have been successful, and many companies selling them have gone bankrupt.
Although there are many reasons for the lack of success, the most important reason is the high cost and low performance of these products.
Although these products have the so-called aesthetic advantages, they do not have any economic significance.
We discussed later in this article why there is no practical value for solar roof solutions.
Back to Tesla, this is the only thing and the only thing about the solar roof concept
Musk stressed that it is the appearance of the product (
4 different varieties
See below).
Tesla claims that it can achieve this appearance by clamping a layer of color blind film between the solar cell and tempered glass (See below).
Color blinds change the appearance of the panel according to the angle (image below).
The inefficiency of this approach and the ineffective cost are obvious.
In addition to adding a layer of cost in the form of color film, the shutter effect can significantly reduce the energy output of the panel as the sun tracks change during the day and season.
Textured glass is another feature that Tesla has shown during the presentation, and it also leads to lower light absorption and lower efficiency.
In addition to the known solar panel issues, Tesla and SolarCity are now adding new problem layers to their proposed solution :-
Technically, tempered glass is not a new material on the roof.
There are many tempered glass roofs to choose from, but these options are not common due to multiple reasons such as safety, cost, condensation and water management.
O as we all know in terms of safety, glass is slippery
Especially when it\'s wet.
How safe would it be to walk on these roofs where needed?
O tempered glass is vulnerable to edge damage while providing considerable lateral resistance.
Therefore, tempered glass is usually successful in the application of glass edge shielding contact.
It is not clear what impact the exposed tempered glass edge of the Tesla solar tile may have in the installation of the residential roof.
Another big problem with glass is condensation.
Note that many successful roof types handle condensation and moisture well
Mainly by absorption.
But the glass does not absorb water.
In addition to causing potential power problems, condensation will attract dirt and create long-term cleaning problems on the roof, as well as performance problems in solar production.
How can Tesla/SolarCity solar panels and interconnect handle condensation?
We think that some
In order to solve the condensation problem, some trivial engineering work needs to be done. -
As we have discussed, the incidence of the sun is changing throughout the day and about a year.
The impact of coating and blinds on energy production is unknown (
But could be a lot lower than the normal panel)-
We believe that solar cells will be manufactured using Panasonic or Silevo technology at the Buffalo plant.
We already know that Tesla may pay a premium to Panasonic to keep the plant operating.
This does not help with the cost structure of the solar roof. -
Tesla/SolarCity has a tricky problem, which is to become a high-selling listed company in a market mainly served by low-cost local/regional construction workers.
For the company, being an installer is not a win-win situation at all. -
Tesla retail stores are not an effective channel for roof solutions.
For all of these reasons, we believe that this solar roof product line will be a complete matte. SolarCity co-
Media quoted Musk\'s cousin and founder, Peter Ryf, as saying that solar roofs can easily take up 5% of the new roof market in a year or two.
However, this comes from someone who has missed guidance in almost every quarter of the past year and a half.
How realistic it is to predict two years from this management
Especially when the main purpose here is to convince Tesla investors of the value of the SolarCity merger?
In our view, this product looks too unbaked to reach production in 2017.
Even if it is produced according to Tesla\'s standards, it means some specific installations.
Based on what is presented and conveyed, we firmly believe that there will be no meaningful production in 2017.
By the time volume 2018, the reality will begin, the product will be found to be dumb and may be discontinued.
Solar roof, if it\'s shipped, like Tesla Model X-
Looks neat but expensive, impractical and problematic.
Who knows, this may eventually be the market that Tesla is pursuing. Vanity -
Its function, or its appearance, follows the form.
As part of the SolarCity merger dog and pony show, we found it interesting, sir.
Musk selectively forwarded a Sun City tweet: Does this mean that the Sun City spent a good time in season 3?
If so, why didn\'t you hear SolarCity\'s peep on the third quarter earnings day? Why did Mr.
Musk didn\'t raise SolarCity\'s revenue date as much as Tesla did?
It should also be noted that Tesla has been pushing investors to vote for SolarCity\'s acquisition \"as soon as possible --
It will appear before SolarCity\'s third-quarter results. (see )
Given Tesla\'s push, some suspect that SolarCity\'s results may be lowerpar.
We believe that waiting for the results of SolarCity Q3, and then asking Tesla investors to vote, will better serve the interests of Tesla shareholders rather than create unproven hype.
At the time of the announcement, due to the lack of management experience in Tesla and SolarCity, we did not have much expectation for solar roof products, but were still surprised at how the team was below the already low expectations.
The launch of this product is so bad that we doubt whether Musk is in despair.
The goal here is to come up with more and more great product ideas in the hope of getting Tesla investors to vote for the merger?
Or is the game now looking for a new bunch of gullible investors?
Regardless of the intent, there is no doubt that Elon Musk\'s brand value will compete to zero with such ridiculous product sales.
Since Tesla\'s valuation is mainly the Musk brand, investors should be careful.
From a financial point of view, any reasonable investor should be very clear that the SolarCity merger is Tesla\'s most ridiculous acquisition ever, unless it continues to buy Space X.
Before that, it was on the Solar Insights user platform.
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Disclosure: I/we have no positions in any of the stocks mentioned and no plans to start any positions in the next 72 hours.
This article was written by myself and expressed my views.
I received no compensation (
In addition to Seeking Alpha).
I have no business relationship with any stock company mentioned in this article.
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