Tesla Inc. took a $62 million hit when it abandoned some of its research and development work within its solar energy and battery storage businesses, the company said in a regulatory filing.
Tesla didn't specify what research and development projects it abandoned, but the company said in an earlier filing that they are related to solar energy initiatives it inherited when it acquired SolarCity in November 2016.
The company initially disclosed that it took a $47 million impairment charge related to the research and development work that it scrapped, and wrote off another $15 million in equipment related to those efforts in a filing it made in late April with the Securities and Exchange Commission following its first-quarter financial report.
Tesla, in the filing this week, said it is "continuing with design iterations and testing" on the solar roof product that it makes at its sprawling RiverBend factory in South Buffalo. Tesla CEO Elon Musk said in June that the company was working on "version three" of the solar roof, which is designed to look like a conventional roof but with solar cells inside.
Musk tweeted earlier this week that Tesla hopes to be producing about 1,000 solar roofs a week at the Buffalo factory as part of a long-delayed ramp in the production of what the company expects to be the central product at the Buffalo factory. Tesla said in the filing that it has installed the solar roof in eight states, but has never said how many it has produced and the company has repeatedly delayed its timetable for starting high-volume production of the new product in Buffalo.
Those delays also have affected the profitability of Tesla's energy generation and storage business. While the battery storage business has been growing, Tesla's solar energy business has been shrinking.
Tesla's solar business installed just 29 megawatts of solar generating capacity in the second quarter, a nearly two-thirds drop from a year ago, as it pushed sales online and in its stores as a way to reduce costs. The second-quarter deployments were 47% less than in the first quarter and the lowest for any three-month period dating back to at least 2013. Just three years ago, the rooftop solar business deployed more than 200 megawatts in a single quarter.
But Tesla said in the filing that it expects its residential rooftop solar business to "stabilize and grow in the second half of the year."
The delays in ramping up solar roof production at its 1 million-square-foot factory in Buffalo also have led to "higher costs from temporary manufacturing under-utilization of our Solar Roof ramp," the company said in the filing.