Tesla’s Musk shares plan for two new solar products during SolarCity’s earnings call ahead of merger deal closing
Tesla Motors Inc (NASDAQ:TSLA) Chairman and CEO Elon Musk attended earnings call for the second quarter of fiscal year 2016 (2QFY16) of SolarCity Corp (NASDAQ:SCTY) announced on Tuesday. It is unusual for a chairman to be present during conference calls, but it is explicable given the pending merger of his companies.
Electrek reported that Mr. Musk announced that the solar installer will reveal a “solar roof” production. Although, he did not give details about the product, the Tesla man cleared that ‘Tesla Solar’ will targeting the roof industry with new integrated products, instead of just installing solar modules on current roofs.
Soon after, SolarCity CEO Lyndon Rive talked about the unveiling for the two new products before the end of 2016, in-line with the expected time for deal closing (4QFY16), Mr. Musk came into action and said:
“It’s a solar roof, as opposed to modules on a roof.”
Then, Mr. River confirmed that they’re developing a roof integrated product.
Mr. Musk added, “I think this is really a fundamental part of achieving differentiated product strategy, where you have a beautiful roof. It’s not a thing on the roof. It is the roof.”
Mr. Rive expects to enter a new market with his solar company, adding that about 5 million new roofs are installed per year in the US. If a household requires replacement for its roof, they do not wish to spend on solar panels as they would remove it. However, if solar panels are the roof and you need to replace it, there is no problem to get a power-generating roof.
Mr. Musk foresees a “huge” market for the roofs ready for replacement. He said that the new segment plan will work along with the company’s existing installation on current roofs, expecting no cannibalization among its products.
From the executives’ comments it appears that SolarCity plans to unveil two solar products: one for current roofs and the other integrated with the roof. The modules are expected to be produced at SolarCity’s under construction 1GW factory in Buffalo, NY. The assembly line for the module is expected to start manufacturing by 2QFY17.