TMC is an independent, primarily volunteer organization that relies on ad revenue to cover its operating costs. Please consider whitelisting TMC on your ad blocker and becoming a Supporting Member. For more info: Support TMC

SolarCity (SCTY)

Discussion in 'TSLA Investor Discussions' started by Curt Renz, Mar 24, 2014.

Tags:
Thread Status:
Not open for further replies.
  1. TMSE

    TMSE Member

    Joined:
    May 17, 2016
    Messages:
    934
    Location:
    Seattle
    Your comment would have made perfect sense if not for the $1/yr lease of Buffalo fab for 20 years. NY state has already invested over $750 million in the plant.

    My guess is that Panasonic/Tesla would put up capital equipment worth no more than $750 million in the first stage. NY state would increase its investment as the number of jobs in the plant increase. So, my rough estimate on Capex of NY state vs. Tesla/Panasonic is roughly 50:50.

    Majority of the cost of PV production is plant/equipment depreciation, about 67% of total cost. Half of that depreciation is a freebie thanks to NY state. So, the PV produced at Buffalo is about 33% cheaper, which is price competitive with even the Chinese import.
     
  2. TheTalkingMule

    TheTalkingMule Distributed Energy Enthusiast

    Joined:
    Oct 20, 2012
    Messages:
    2,732
    Location:
    Philadelphia, PA
    Panel price fluctuations are now irrelevant IMO, especially if these premium+ gigafactory panels pop out at $.55/W as planned. These $.35/W panels will be fit for desert usage, not my exquisite rooftop. They can take Chinese ground-mounted panels as low as they like, these American-made premium panels manufactured at scale will never sit on the shelf. They could(and likely will) triple the Buffalo factory output in short order with no problem.

    It's like we all read the well established facts about the solar boom set to explode on the US then completely ignore it when we go to gauge near term demand. 1GW is nothing, when Germany was booming around 2010-12 they installed that in a matter of weeks.
     
  3. SBenson

    SBenson Active Member

    Joined:
    May 22, 2014
    Messages:
    1,866
    Location:
    Benson
    #6983 SBenson, Oct 25, 2016
    Last edited: Oct 25, 2016
    That is a good point.

    Here is an another interesting related point.

    Model X
    First reveal - Feb 2012
    Second reveal - Sep 2015
    Stable volume production - Q2/Q3 2016

    Powerwall
    First reveal - Apr 30, 2015
    Second reveal - Oct 28, 2016
    Volume production - ?? unknown ??

    Model 3
    First reveal - Mar 31, 2016
    Second reveal - ?? unknown ??
    Volume production - ?? unknown ??

    Whatever solar roof we are going to see is equivalent to the first reveal. If past is any guide, it will be a few years before any revenue adds to the financials.

    The show will razzle-dazzle many, including myself. But it will be least relevant in terms of financial sustainability.

    The Nov 1 call about financials will be the most meaningful. Most people, including me, are expecting TSLA to show a path to sustainability on that call. But as I see that SCTY's er date is still not posted, I'm afraid it might as well be a public disclosure of material events (I will let you interpret what that means).
     
  4. bdy0627

    bdy0627 Active Member

    Joined:
    May 19, 2015
    Messages:
    3,452
    Location:
    Appleton, WI
    I posted this in the short term investors thread with no response. I know Sbenson's position on this. Any other informed opinions here?

    Opinions about the cash needs of TSLA after the merger appear to be all over the map. The high is about $12.5 billion via Oppenheimer. I'm not sure what the low is, perhaps $2 billion if SCTY's contracts can be further monetized. Many don't think SCTYs contracts can be monetized further. SBenson is adamant about that. I have read a lot about SCTY but I remain confused about the reality of its financials and how much of a drag it will be on TSLA, at least over the next year. I can't make much sense of its contracts. Any consensus here about a realistic high and low? Is it impossible to say until we know more about SCTY's financials? The financial drag of SCTY on Tesla will have a lot to do with TSLA's SP over the next year it seems.
     
  5. electracity

    electracity Active Member

    Joined:
    Jun 8, 2015
    Messages:
    3,718
    Location:
    60606
    Powerwall 2.0 should be the real deal and finally make a significant contribution to revenue next year. I suspect everything else will be a typically Musk faux launch, with the actual product coming in quantity later. The upside is that we get the excitement of two launches for the same product! It's like two birthdays per year.

    But I do think they will show some cool new stuff. We haven't heard much at all from Tesla Energy for a long time.
     
  6. SBenson

    SBenson Active Member

    Joined:
    May 22, 2014
    Messages:
    1,866
    Location:
    Benson
    Agreed.

    I was referring to the Solar Roof when stating that it won't do anything to financials (as it's related to SCTY, which is this thread topic).

    But is is a good point in favor of TSLA's situation.
     
  7. winfield100

    winfield100 Active Member

    Joined:
    Feb 16, 2013
    Messages:
    2,184
    Location:
    vivant traveler, northern hemisphere, bangladesh
    checkout
    Sun Electronics - Lowest Prices in Solar Panels, Kits, Inverters
     
  8. rallykeeper

    rallykeeper Member

    Joined:
    Jul 9, 2013
    Messages:
    207
    Location:
    Southern California
    I'm clearly in the minority here, but for the reasons I've laid out elsewhere, I don't believe SCTY will be a cash drag to TSLA over the next 12 months. SCTY only has to pull off 1 or 2 more cash equity deals to continue to fund their existing pipeline over the next few quarters.

    I think the outer years are less clear, since SCTY will run out of past projects to monetize. Also, they definitely need to lower install/sales/ga expenses. We all seem to agree on this point.

    The good news is that we only have a week to find out Elon's thoughts. My guess is that they are going to effectively announce a firesale on prior deals (selling at any price). Loss gets accounted for as part of the writedown on the purchase so GAAP impact on TSLA is negligible. That provides cash flow to SCTY and potentially to TSLA to fund near-term projects and current losses on existing business model. What happens when the fire-sale is over is less clear to me.
     
    • Helpful x 1
    • Funny x 1
  9. tander

    tander Active Member

    Joined:
    Jul 23, 2012
    Messages:
    1,430
    [
    Without getting into the nitty gritty of the numbers, it's worth considering that SCTY is basically in the middle of a big product pivot right now which is supposed to be announced on Friday. The combination of solar panels+batteries significantly changes the business model going forward. This should basically be not just a best in class product, but a product the pretty much sells itself since it basically makes rooftop solar the cheapest energy provider available. The biggest problem with solar is that whole not have sun at night thing, batteries solve that problem. I suspect that the mood about the merger and SCTY's perceptions will change drastically over the coming weeks as that becomes more clear.

    This opinion doesn't stand for a consensus, but cash is pretty far down the list of major things Tesla/SCTY needs to be concerned about, the consensus perception and the reality of SCTY's health are pretty different right now.
     
    • Like x 1
  10. electracity

    electracity Active Member

    Joined:
    Jun 8, 2015
    Messages:
    3,718
    Location:
    60606
    [​IMG]
    [​IMG]
     
    • Informative x 2
  11. tander

    tander Active Member

    Joined:
    Jul 23, 2012
    Messages:
    1,430
    #6991 tander, Oct 26, 2016
    Last edited: Oct 26, 2016
    Has anybody else read the 425 filing from yesterday. Page 24.
    In Q2 they had about 25M in cash/loan sales, so is this actually saying they had about 125M in Q3? Sounds too good to be true. Edit: I'm thinking this means 5x increase in cash/loan ratio to lease/ppa, not a 5x increase in cash/loans.
     

    Attached Files:

  12. rallykeeper

    rallykeeper Member

    Joined:
    Jul 9, 2013
    Messages:
    207
    Location:
    Southern California
    On the call today, Elon said that SolarCity will be cash neutral and potentially a cash contributor in Q4 (assuming merger goes through).

    He later added that he expects SCTY to be basically cash flow neutral next year.
     
    • Like x 2
  13. TheTalkingMule

    TheTalkingMule Distributed Energy Enthusiast

    Joined:
    Oct 20, 2012
    Messages:
    2,732
    Location:
    Philadelphia, PA
    SCTY can be cash neutral any time they like by simply doing installs exclusively in their mature and semi-mature markets. They're installing simple solar arrays at a premium, it's not rocket science.

    My worry is this threatens to erode long term marketshare, but every other major player has *sugar* the bed so bad this year that I guess it's not a big deal. For now.
     
  14. Erleichda

    Erleichda Member

    Joined:
    Jan 15, 2013
    Messages:
    136
    Location:
    Portland, OR
    Does anyone know who Solar City uses for their data? Solargis?
     
  15. electracity

    electracity Active Member

    Joined:
    Jun 8, 2015
    Messages:
    3,718
    Location:
    60606
    I would guess they built their own.

    Yes, I'm glad he mentioned that fact again. The caution is that his definition of cash flow neutral probably doesn't include some types of system finance.

    Solarcity has been extraordinarily over leveraged, which is just stupid considering its potential impact on Musk's other businesses.
     
  16. TheTalkingMule

    TheTalkingMule Distributed Energy Enthusiast

    Joined:
    Oct 20, 2012
    Messages:
    2,732
    Location:
    Philadelphia, PA
    Just drove through the parking lot of the Buffalo gigafactory, place is looking great. A nice English couple have a fish and chips shop across the street and have now added on a rugby field to the pub. You'll be able to finish your work day at SolarCity then drink beer and watch/play rugby. Sweet deal.
     
    • Like x 1
  17. neroden

    neroden Model S Owner and Frustrated Tesla Fan

    Joined:
    Apr 25, 2011
    Messages:
    14,458
    Location:
    Ithaca, NY, USA
    FWIW the Panasonic and Silevo panel designs are *very* similar technically; basically the same design. Each company has patents on different specific "tricks" for improving this type of panel. I believe that the Panasonic deal is basically one of merging the patent portfolios so that Panasonic/Tesla can build one panel design using ALL the patented tricks.
     
    • Like x 3
    • Informative x 2
  18. neroden

    neroden Model S Owner and Frustrated Tesla Fan

    Joined:
    Apr 25, 2011
    Messages:
    14,458
    Location:
    Ithaca, NY, USA
    This is incorrect; it was my first thought, but then I did my research, which you haven't done. See my previous post.

    If you look carefully, you'll realize that the Panasonic and Silevo panel designs are fundamentally similar (tunnelling junction with a layer of crystalline silicon and a "thin film" layer of amorphous silicon) but they have different patented "tweaks" (Silevo figured out how to use copper instead of silver, for instance, big money saver).

    Ask yourself: what does Panasonic get out of the deal with Tesla/SolarCity/Silevo? They get access to Silevo's patent portfolio. What does Tesla/SolarCity/Silevo get? They get access to Panasonic's patent portfoilo. The panels utilizing *both* sets of patents will be better and cheaper to manufacture than *either* design would be by itself. This is much more of a coup than most people realize; they may well be able to beat out SunPower for the most efficient panel and make it even cheaper than previously advertised.
     
    • Like x 4
    • Informative x 3
    • Helpful x 1
  19. electracity

    electracity Active Member

    Joined:
    Jun 8, 2015
    Messages:
    3,718
    Location:
    60606
    #6999 electracity, Oct 31, 2016
    Last edited by a moderator: Nov 2, 2016
    See if you can find one person in the industry who believes this positive spin. The primary challenge is manufacturing in volume, not design. The Silveo guys are rumored to be just under a $1 at volume. Trina will be approaching 30 cents by the end of the year.

    You get kicked out of the factory when you are not able to be remotely price competitive at volume.

    In-post Mod edit: refer to post #7010
     
  20. TheTalkingMule

    TheTalkingMule Distributed Energy Enthusiast

    Joined:
    Oct 20, 2012
    Messages:
    2,732
    Location:
    Philadelphia, PA
    Nonsense. Volume is wonderful, but differentiation is key. Panasonic is feeling the crunch of subsidized Chinese solar, just like everyone else, but they realize SCTY/TSLA allows them to hitch their wagon to the Tesla brand which will own the US premium solar market and command the associated higher margins.

    Tesla/SolarCity are laying down clear messaging that they'll take early partner along for the ride within all aspects of their energy world.....manufacturing, finance, logistics. Panasonic, Hancock, CITI, Fidelity, the city of Buffalo....all should see major returns once this total package is humming along.
     
    • Informative x 2
Thread Status:
Not open for further replies.

Share This Page

  • About Us

    Formed in 2006, Tesla Motors Club (TMC) was the first independent online Tesla community. Today it remains the largest and most dynamic community of Tesla enthusiasts. Learn more.
  • Do you value your experience at TMC? Consider becoming a Supporting Member of Tesla Motors Club. As a thank you for your contribution, you'll get nearly no ads in the Community and Groups sections. Additional perks are available depending on the level of contribution. Please visit the Account Upgrades page for more details.


    SUPPORT TMC