Tesla is opening a new storefront in New York’s Chelsea neighborhood tomorrow that showcases not only vehicles, but also solar panels and energy-storing batteries. While the company has been busy moving into this larger space on Manhattan’s west side, it’s been quietly updating its 300 other showrooms around the world to offer more of its other products. In April, it ended door-to-door sales of solar panels. The revamp also makes way for the addition of the company’s much-anticipated solar roof shingles.
Though Tesla’s vehicles almost entirely drive revenues for the company, CEO Elon Musk is keen to prove the value of a roughly $2.6 billion investment in solar energy.
Last year, Musk made the controversial decision to acquire SolarCity, a company that was founded by his cousins and where he sat on the board. The move prompted questions of whether Musk was self-dealing. The Tesla chief is now on a mission to prove out that this massive purchase was in the best interest of the company and its shareholders. To do that, he needs to sell his vision of a fully solar-run home.
Since acquiring SolarCity, Musk has launched a solar-tiled roof that is more sophisticated-looking than traditional solar panels. After unveiling the roof last fall, the company opened up pre-orders for the roof in May. Deliveries are expected in the beginning of 2018. While the product was well received for its design aesthetics, at $21.85 per square foot, it is hugely expensive. Plus the company suggests solar roof customers also purchase a Powerwall storage battery—an additional $6,000.
Nevertheless, Tesla argues that the value derived from having an energy-generating roof (not to mention government incentives for going solar) make it the cheapest roof option available. But customers may find it easier to plunk down $70,000 for one of its high-end cars (or as little as $35,000 for its newest car, the Model 3) than invest in the full spectrum of solar utilities that Tesla has on offer.
Tesla is growing revenues for its energy-generation and storage segment, raising sales from $23 million in the third quarter of last year to $317 million in the same period this year. Tesla has also promised in past earnings statements that it will ramp up to a gigawatt of solar cell production annually by the end of 2019. Tesla confirmed that it is still aiming for that production goal.
Growing revenues or no, Tesla continues to lose lots of money. The company took a GAAP net loss of $3.70 per share, down from last quarter’s GAAP net loss of $2.04 per share. It also noted that expects further losses in Q4 of $1 billion as it continues to push production of the Model 3.
Now the hope is that Tesla can stoke sales by educating customers who are lured in by its electric cars to consider the full spectrum of its electric products.
[This story has been updated to clarify that customers who buy a solar roof do not need to buy a Powerwall, though it is suggested for excess energy storage.]