Tesla Energy
Tesla Energy Operations, Inc. is the clean energy division of Tesla, Inc. that develops, manufactures, sells and installs photovoltaic solar energy generation systems, battery energy storage products and other related products and services to residential, commercial and industrial customers.
Company type
April 30, 2015
14.7 GWh battery energy storage systems (2023)
223 MW solar (2023)
US$6.04 billion (2023)
The division was founded on April 30, 2015, when Tesla CEO Elon Musk announced that the company would apply the battery technology it developed for electric cars to a home energy storage system called the Powerwall. In November 2016, Tesla acquired SolarCity, in a US$2.6 billion deal, and added solar energy generation to Tesla Energy's business. This deal was controversial; at the time of the acquisition, SolarCity was facing liquidity issues.
The company's current power generation products include solar panels (manufactured by other companies for Tesla), the Tesla Solar Roof (a solar shingle system), and the Tesla Solar Inverter. The company also makes a large-scale energy storage system called the Megapack. Additionally, Tesla develops software to support its energy products.
In 2023, the company deployed solar energy systems capable of generating 223 megawatts (MW), a decrease of 36% over 2022, and deployed 14.7 gigawatt-hours (GWh) of battery energy storage products, an increase of 125% over 2022. The division generated $6.04 billion in revenue for the company in 2023, a 55% increase over 2022.
Controversies and lawsuits[edit]
SolarCity purchase[edit]
Some investors criticized the 2016 purchase of SolarCity, calling it "a misguided effort to rescue two companies that depend on investors and the government for operating cash."[79] In 2019, multiple shareholder groups filed a lawsuit against Musk and Tesla's directors, claiming that the purchase of SolarCity was done solely to benefit his cousin Lyndon Rive (Co-founder of SolarCity) and Elon Musk and came at the expense of Tesla and its shareholders.[80][81] Tesla directors settled the lawsuit in January 2020, leaving Musk the sole remaining defendant.[82][83] In 2022, a Delaware court ruled in favor of Musk. "[The] Tesla Board meaningfully vetted the Acquisition, and Elon did not stand in its way. Equally if not more important, the preponderance of the evidence reveals that Tesla paid a fair price — SolarCity was, at a minimum, worth what Tesla paid for it," read the opinion by Vice Chancellor Joseph Slights.[84][85]
Allegations of faked sales numbers at SolarCity[edit]
In July 2018, three former employees filed a lawsuit against SolarCity, alleging that the corporation had approved the creation of "fake sales accounts", which resulted in an "unreasonably high valuation of SolarCity" for investors.[86][87] After allegedly informing management, including CEO Elon Musk, of these incidents, the employees were fired, which they argue contravenes California's whistleblower protection laws. Tesla denied the allegations of contravening whistleblower protections[86] and, in June 2020, the case was dismissed with prejudice.[88]
Walmart lawsuit and Project Titan[edit]
SolarCity installed and managed solar panels on the roofs of more than 240 Walmart stores. After fires on the roofs of seven of those stores, Walmart filed a lawsuit against Tesla on August 21, 2019, claiming that the fires were caused by negligent installation and maintenance that relied on "untrained and unsupervised personnel".[89]
At around the start of the lawsuit, it was revealed that Tesla had initiated a secretive program, "Project Titan", to replace solar panel parts that could cause fires.[90] Former employees said that Project Titan involved replacing two parts believed to be causing the fires: the connectors between the panels made by Amphenol and the power optimizers built by SolarEdge.[91] Tesla said that it believed Project Titan was successful in addressing issues with the connectors and their higher rate of failure.[91]
On November 9, 2019, it was announced that Walmart and Tesla had settled their lawsuit. A joint statement provided by Tesla stated the companies were "pleased to have resolved the issues raised by Walmart" concerning the installations, and looked forward to "a safe re-energization of our sustainable energy systems." The terms of the settlement were not disclosed.[92]
Australian MegaPack fire[edit]
In July 2021, a fire ignited within a Tesla Megapack in Victoria during testing at Australia's Big Battery site, one of the largest fixed batteries in the world.[93] The Australian County Fire Authority issued a statement to nearby suburban areas regarding possible toxic smoke.[94] The cause of the fire was a coolant leak, and "the Megapack that started the fire had been manually disconnected from a number of monitoring, control, and data collection systems because it was undergoing testing at the time of the incident".[95]
Solar Roof delays and price increase[edit]
Musk introduced the Tesla Solar Roof, a solar shingle product in an August 2016 presentation.[24] It was later revealed that the shingles were fake,[27] which would become a major point of contention with skeptics of Tesla.[28]
In August 2017, limited production of tiles for the Solar Roof began at the company's Giga New York factory in Buffalo, New York.[96] After testing on employees' roofs, Tesla announced in January 2018 that it would begin installing the product "within the next few months",[97] but by July 2019, the company had only completed about a dozen roofs.[98] In October 2019 it was reported that Tesla was "still tinkering with the product three years after announcing the concept, having done trial installations with two different iterations so far."[61] The second version turned out to be too expensive for Tesla to manufacture in volume.[61][99] Tesla was only able to start producing the Solar Roof in volume in March 2020.[30]
On April 11, 2021, Tesla sent out a message to many customers who had pre-ordered their roofs (including customers who had signed contracts well over a year prior) informing them of a cost increase of about 30% for all projects, including some that already had an agreed-upon start date.[100] Tesla said that it would "be prioritizing customers based on the order in which they accept their updated agreements," potentially adding time for customers who had waiting for months or a year for their new roof.
On April 26, 2021, Elon Musk admitted that the company made "significant mistakes" in their solar roof tile project, including that they did not anticipate the trouble of "assessing the difficulty of certain roofs [as the] complexity of roofs varies".[101]
Facing a class-action lawsuit filed by Solar Roof customers, Tesla revealed that it planned to let some customers who had signed contracts before the April 2021 price changes revert to their original price.[102]