Years ago, a common corporate model used to be major companies creating a portfolio of different companies.
Quaker Oats, for example, used to have a toy company, men’s clothing business and restaurants, in addition to its core business. The idea was that if its main business suffered a bad quarter the other businesses would compensate for that, thus giving the company an even flow of income and growth.
The corporate model changed. Companies changed to concentrate on its core business, and any acquisitions or capital spending would be to enhance those businesses. Companies then shed those companies that didn’t compliment the core business.
Tesla, make no mistake, is a car company. That is its core business. That’s the market it wishes to compete, and why shareholders invested their money. Do they want to make money in their solar business? Sure. Particularly if a community is going to offer them a facility worth $750 million. They will do what they can to make the business profitable.
However, management will concentrate their efforts on the car business, that’s where the market will judge the value of the company. That is where management will concentrate most of their efforts. That will make or break the company.
Politicians will talk about clawbacks if the company does not meet the previous agreed employment goals. However, that is of very little concern to Tesla, I’m sure.
The question that should be asked is, why the community and state has made it so unattractive to businesses that the only way they can attract major companies is to offer them three quarters of a million dollars facility?