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Tesla hedges on timetable for solar roof production increase in Buffalo

Tesla once again is backing away from its timetable to ramp up production of its new solar roof in Buffalo.

The electric vehiclemaker, which has promised to bring 1,460 jobs to its South Park Avenue solar plant, said Wednesday that it now expects to ramp up production of the solar roof – expected to be Tesla’s main product in Buffalo – during 2019.

Just three months ago, Tesla predicted that solar roof production would increase significantly during the first half of this year, after failing to meet its previous timetable to ramp up solar roof production by the end of 2018.

In its fourth-quarter earnings announcement Wednesday, Tesla gave little indication that the solar roof – designed to look like conventional roofing shingles but with solar cells inside – is close to being ready for rapid deployment.

The company said it is installing solar roofs “at a slow pace” so the company can learn from design changes it made in the product, as well as gaining a better understanding of how to install the roof in bad weather.

Tesla also said it is working to make the process used to manufacture solar roofs more efficient – upgrades that it currently is testing.

“We plan to ramp up the production of Solar Roof with significantly improved manufacturing capabilities during 2019, based on design iterations and testing underway,” CEO Elon Musk said in the company’s quarterly letter to shareholders.

Tesla has blamed the previous delays on the complexity of the solar roof, which looks like a conventional roof but has solar cells inside, and the need to do intensive testing on the new product, for the delay.

While Tesla keeps working on the solar roof that it unveiled in a Hollywood event in October 2016, its conventional solar energy business continues to shrink.

Tesla installed 73 megawatts of solar energy generating capacity during the third quarter, down from 17 percent from a year ago. It was the worst quarter for solar energy deployments in at least five years, dating back to before Tesla acquired the solar energy business from SolarCity.

Tesla’s solar deployments have plunged by 38 percent during each of the last two years, and were 61 percent lower than the all-time high set in 2016.

Since then, Tesla has moved aggressively to stem losses in the solar energy business. Tesla said it now gets most of its solar sales from its own website and its network of 378 stores.

That shift has resulted in “significantly lower” customer acquisition costs, which had remained stubbornly high when the solar business was operated by SolarCity before Tesla acquired it in November 2016.

Overall, Tesla said it was profitable for a second straight quarter, although it earned less in the fourth quarter than it did in the third.

Tesla, which expects to save about $400 million this year by cost-cutting measures that included a 7 percent workforce reduction, said it could be profitable during the first quarter, although Musk warned that would “require us to successfully execute on many fronts.”

The company said it earned $139.5 million in the fourth quarter, compared with a $311.5 million profit in the third quarter.

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