As usual, there can only be one CEO. It almost looks like Elon got more and more involved at Solarcity as their lend long, borrow short financing model started falling apart. And when Elon gets involved, he tends to take over things completely.
Lyndon's passion was volume. Getting solar installed everywhere as cheap as possible. But Solarcity was also floundering on its high customer acquisition costs. Basically Solarcity grew faster than economical sales and marketing would allow.
So that was two fundamental business knocks against Lyndon's leadership. Growing a company fast is fine only if you can continue to finance it and continue to economically grow it.
So Elon changed the broken lend long, borrow short model, which caused sales to drop, which caused Solarcity to jettison most of its sales and marketing force. Two problems solved, but now you are left with a much smaller company.
So given that solar installers are becoming like plumbers and electricians, how do you differentiate yourself? Batteries and solar roofs. Both are much more niche products but at least they are unique.
Meanwhile, Tesla gets to enjoy free cash flow from the PPA agreements. Assuming the credit quality stays good, the transaction might even have made sense