Order a Tesla Powerwall in the US today and you’ll be waiting six to nine months for it to arrive. Want to combine that with a Solar Roof and it will be well into 2019 before installation might happen. Elon Musk’s firm are experiencing such severe delays on these energy products that those who have ordered are regularly being told that there is no estimated installation date yet. Are the products so popular that Tesla can’t keep up, are there severe production issues, or is there something else going on?
Tesla’s Solar Roof consists of glass tiles which can each be embedded with high-efficiency photovoltaic cells to offer the benefits of solar panels whilst maintaining the aesthetic of a home. For greater energy independence, a Solar Roof or solar panels can be combined with a energy storage solution, such as Tesla’s lithium ion stationary battery - Powerwall - which can power a home during the night or grid outages, and minimize if not remove your need for grid energy altogether.
That all sounds great, of course, and consumers flocked to claim their energy independence with Tesla’s high specifications and sleek designs. In 2015, the year Powerwall was released, Tesla gained a 33% share of the US residential solar market. By 2017, however, that share of the market had dropped to just 16%, according to research by Wood Mackenzie.
Tesla was undoubtedly a pioneer in this market but during 2016 the competition ramped up. This competition was inevitable and was accompanied by growth in both the solar and stationary battery markets as a whole. Tesla does not divulge its residential battery sales figures but the clues suggest that LG Chem may have beaten Musk’s firm to top-spot during 2018.
California's Self-Generation Incentive Program data, for example, offers some insight into Powerwall deliveries within the golden state. According to Brett Simon, senior storage analyst at Wood Mackenzie’s GTM Research, Tesla accounted for 82% of residential megawatt capacity that had reserved funding under the SGIP in 2017, but accounted for only 46% of reserved residential megawatts between January 2018 and May 2018. LG Chem, meanwhile, had 53%.
Competition does not explain the delays on deliveries of Tesla’s solar and battery products however, unless reduced profit has lessened production spending but there are no signs of that. In fact, the company remains bullish on traditional solar for both commercial and residential rooftops and claims a four to six week span from sale to install, while announcing production ramp-ups for Powerwall, at the Reno Gigafactory, and for Solar Roofs at the Buffalo, New York factory in 2019.
Some commentators have suggested that Tesla’s energy products have taken a backseat to their automobile production. Indeed, early this year the firm was managing massive delays on its new Model 3 vehicle, when deliveries were expected to take 12 to 18 months from the order being placed. Musk blaming “over-automation” of basic tasks its factory, even specifically criticizing “a fluff collecting robot” in the process. Then, in May, delivery estimates on the Model 3 shifted to just four to six months, fuelling claims that Tesla’s auto production was given pole position in the business.
Another theory is that Tesla’s work to restore power to Puerto Rico, after a series of hurricanes devastated the Caribbean nation last summer, is another disruptive factor. In June, Musk said that Tesla have ‘about 11,000’ energy storage projects underway in Puerto Rico, many for critical services such as a hospital, a sanitary sewer treatment plant, a water pumping station, an elderly community center, and a youth club. Rumours suggest that these installations could be part of a series of microgrids that could form a nationwide virtual power plant.
All this doesn’t help Tesla’s solar and storage customers in the mainland US however, who have hit social media and the blogosphere with news of their delays. This is in stark contrast to customers in Europe and Australia, where deliveries are dispatched within two to three months of ordering.
@Tesla @elonmusk - I put my trust (and significant deposit) behind your Powerwall and solar solution for a new home. Today I get a call saying "all shipments and installs halted indefinitely". Who does business this way?
— Seth Brody (@sethabrody) July 10, 2018
"This [news of delays] astounds me! I'm in Australia. We ordered our PW2 in November 2017 and had it (along with a 10 kW solar system) fully installed and running in January 2018,” one Tesla Motor Club member in Australia wrote. It was “[a] timeframe of about 2.5 months from when we accepted the quote and paid our deposit."
It is clear that these delays to US customers are are serious problem for Tesla that is likely to see them lose further market share to a strengthening competition. We can speculate about the many reasons that could be causing these delays, be it production issues or shifting priorities, but the underlying reason appears to be the Musk factor. Tesla’s CEO lives up to his reputation of doing a lot of things in a lot of places but continuing to promise even more, elevating expectations that he and his companies cannot live up to, then suffering the backlash.
“The Tesla way, whether it's applied to Powerwalls or electric vehicles or short-sellers or rockets or cave rescues, appears to be more about moving fast and breaking stuff (including one's own systems) in order to achieve the greater goals of renewable energy dominance and electrification of transportation,” said a recent GTM article.
Whether Musk should be applauded for his attempts to “change the world for the better” or criticized for not living up to his promises to customers, or both simultaneously, is up to each of us individually. Although it would be hard to imagine many doubting his disruptive impact.