SAN FRANCISCO — The bombshell message of Elon Musk’s email to Tesla staff Tuesday was that 9% of employees would be let go as the company tightens its fiscal belt while in pursuit of boosted Model 3 sedan output.
But a few paragraphs into the CEO’s missive, which appeared on his Twitter feed, was equally big news: the company is pulling the plug on a new partnership with Home Depot aimed at growing sales of Telsa’s electric-energy collection and storage products through its recent SolarCity acquisition.
In opting not to renew a residential-sales agreement with Home Depot, Musk was ending an initiative that kicked off in February and was aimed at rebranding SolarCity solar sales as Tesla in 800 of Home Depot’s 2,200 locations.
A Home Depot spokesperson told USA TODAY that the company plans to continue to offer Tesla’s products in its stores through the end of the year, along with solar offerings from a range of other companies.
Musk said the reason for killing the deal was to “focus our efforts on selling solar power in Tesla stores and online.”
The CEO’s email noted that majority of those kiosk employees would be offered the opportunity to work in Tesla stores, where the company sells its electric cars, Powerwall electric-storage devices and its solar panels and solar tiles.
When the Home Depot partnership was announced a few months ago, it seemed like a quick way to bring to the masses Musk’s latest business vision: solar energy being collected on a roof, stored in a Powerwall and fed to the home and electric car.
Tesla’s Powerwall costs around $6,000, while its innovative glass solar-panel tiles — which costs considerably more than traditional roof-mounted solar panels — are just now starting to make their way onto rooftops.
Perhaps more than a statement about Tesla’s solar sales inside Home Depot stores, the change of plans is a reflection of the company’s increased focus on its critical entry-level electric vehicle, the Model 3.
“Like the employee reduction, the withdrawal from Home Depot is another indication that Elon is focusing on Tesla’s do-or-die task, consistently produce Model 3s at a high volume,” says Karl Brauer, executive publisher for Autotrader and Kelley Blue Book.
“This focus may come from board pressure or Elon himself, but either way it’s critically important if Tesla wants to remain a viable player in the personal transportation industry,” he says.
While the synergistic opportunities of the SolarCity deal appealed to Tesla fans, some analysts were critical of adding yet another business challenge to Musk’s plate, which already includes flying SpaceX rockets and drilling Boring Company tunnels.
Much was also made at the time of the 2016 purchase that SolarCity’s CEO was Musk’s cousin, Lyndon Rive. Musk already was one of SolarCity’s largest shareholders.
Tesla paid $2.6 billion to absorb the solar company, whose panel manufacturing plant is in New York. Tesla’s mushrooming Gigafactory in Nevada is busy producing cells for both Tesla cars and its Powerwall and Powerpack storage units.
Musk recently announced at the company’s annual shareholder meeting that a second Gigafactory would be built near Shanghai, though details about the project remain scarce.
Elon Musk CEO of SpaceX, speaks to the media during a press conference after the Falcon Heavy Launch on Feb. 6, 2018. CRAIG BAILEY/FLORIDA TODAY VIA USA TODAY NETWORK
Tesla founder Elon Musk presenting the new Roadster electric sports vehicle (on background), presented to media on Nov. 16, 2017 at Tesla’s Los Angeles design center. Tesla says the Roadster will accelerate from 0-60 mph in less than two seconds. Tesla says the new Roadster will cost $200,000 and will be released in three years. /TESLA HANDOUT VIA EPA-EFE
PayPal Chief Executive Officer Peter Thiel, left, and founder Elon Musk, right, pose with the PayPal logo at corporate headquarters in Palo Alto, Calif., on Oct. 20, 2000. Elon Musk made his fortune off PayPal. Online auction giant eBay Inc. announced Monday, July 8, 2002, it would buy the electronic payment facilitator for more than $1.3 billion in stock. PAUL SAKUMA/ASSOCIATED PRESS
SpaceX CEO Elon Musk congratulates teams competing on the Hyperloop Pod Competition II at SpaceX’s Hyperloop track in Hawthorne, Calif on Aug. 27, 2017. A committee of the Los Angeles City Council on April 18, 2018, approved an environmental review exemption for a Los Angeles-area tunnel that Elon Musk wants to dig to test a novel underground transportation system. DAMIAN DOVARGANES/AP
SpaceX’s newest rocket, the Falcon Heavy, the most powerful rocket in the world, lifts off on it first demonstration flight. The rocket leapt off Pad 39A at the Kennedy Space Center in Florida at 3:45pm. on Feb. 6, 2018. CRAIG BAILEY/FLORIDA TODAY VIA USA TODAY NETWORK
This image from video provided by SpaceX shows Elon Musk’s red Tesla sports car with a dummy driver named “Starman” which was launched into space during the first test flight of the Falcon Heavy rocket on Feb. 6, 2018. /SPACEX VIA AP
The twin boosters from SpaceX’s newest rocket, the Falcon Heavy make a successful landing at Landing Zone 1 at Cape Canaveral Air Force Station on Feb. 6, 2018. CRAIG BAILEY/FLORIDA TODAY VIA USA TODAY NETWORK
President Trump talks with Tesla and SpaceX CEO Elon Musk, center, and White House chief strategist Steve Bannon during a meeting with business leaders in the State Dining Room of the White House in Washington, Feb. 3, 2017. EVAN VUCCI/AP
Tesla Motors CEO Elon Musk speaks about the Interplanetary Transport System which aims to reach Mars with the first human crew in history, in the conference given by Tesla Motors CEO Elon Musk during the 67th International Astronautical Congress in Guadalajara, Mexico on September 27, 2016. HECTOR-GUERRERO/AFP/GETTY IMAGES
Tesla Motors CEO Elon Musk unveils the Model X at a launch event in Fremont, Calif on Sept. 29, 2015. The Tesla Motors X is an all-wheel drive SUV featuring a 90 kWh battery providing 250 miles of range and will be able to go from 0 to 60 mph in 3.2 seconds. ROBERT HANASHIRO/USA TODAY
CEO and Chief Product Architect of Tesla Motors, Elon Musk shows of his throwback t-shirt of the “Tesla” heavy metal band on January 24, 2015 in Park City, Utah. LILY LAWRENCE/GETTY IMAGES FOR OCEANIC PRESERVATION SOCIETY
Elon Musk, Tesla CEO, discusses new technologies before an event for Tesla owners and the media held at the Hawthorne Airport. In the background is a Tesla model P85D. ROBERT HANASHIRO/USA TODAY
SpaceX CEO Elon Musk unveils SpaceX’s new seven-seat Dragon V2 spacecraft, in Hawthorne, California on May 29, 2014. The private spaceflight companys new manned space capsule is designed to ferry NASA astronauts to and from the International Space Station. The capsule was named for “Puff the Magic Dragon,” a jab at those who scoffed when Musk founded the company in 2002 and set the space bar exceedingly high. SpaceX went on to become the first private company to launch a spacecraft into orbit and return it safely to Earth in 2010. ROBYN BECK/AFP/GETTY IMAGES
Elon Musk CEO, Cofounder, Chief Product Architect for Tesla with a new Model S car outside the Tesla customer delivery area at the Tesla Fremont factory on June 21, 2012. /JESSICA BRANDI LIFLAND FOR USA TODAY
Elon Musk, CEO of Tesla Motors, poses with a Tesla car in front of Nasdaq following the electric automakerís initial public offering on June, 29, 2010, in New York. /MARK LENNIHAN, AP
Tesla Motors president and CEO Ze’ev Drori, left, and Tesla Motors chairman Elon Musk, right, pose in the Tesla Motors development facility in San Carlos, just south of San Francisco next to a Tesla Roadster on Feb. 19, 2008. The Tesla Roadster, a $99,000 electric sports car powered by laptop computer batteries, is 100 percent electric, can go from 0-60 mph in four seconds and the electric car gets an equivalent of 135 mpg compared to a gas powered vehicle. Production begins mid-March. The car itself is being made in England. JACK GRUBER/USA TODAY
Elon Musk stands in front of parts of the first stage of the Falcon 9 rocket at the company’s headquarters in El Segundo, Calif. on Sept. 18, 2007. DAN MACMEDAN/USA TODAY
