SolarCity Co-founder and CEO Lyndon Rive and Chairman and Co-founder of SolarCity and Tesla CEO Elon Musk discuss the Initial Public Offering (IPO) for SolarCity (NASDAQ:SCTY) that went public today, in an interview to appear on FOX Business Network’s (FBN) After the Bell (4PM/ET). Rive said, that SolarCity (NASDAQ:SCTY)’s goal “is to be cash flow positive by the end of next year.” Elon Musk said that the IPO process “is going to be a tremendous amount of work” and that “we need to improve costs by at least 5 percent a year in order to stay ahead of the incentive reductions.”
Excerpts from the interview are below.
Rive on the goal for SolarCity to become profitable:
"So, in terms cash flow positive, our goal is to be cash flow positive by the end of next year."
Musk on the process of the IPO:
“Yes, I think this is definitely not going to be an easy thing; it’s going to be a tremendous amount of work. As Lyndon was saying, we need to improve costs by at least 5 percent a year in order to stay ahead of the incentive reductions.”
Rive on whether it will possibly work in SolarCity’s favor that you under-promised and perhaps over-deliver:
"Yes, absolutely…if we meet our growth targets and the investment community will start filling with confidence in knowing that this is not a traditional manufacturing. They will see that this is a new energy company, an energy company that creates electricity at the place we are needed. You don’t have this legacy infrastructure, you don’t have transmission and distribution, and you create a place where you’re needed. And it’s cheaper."
Rive on whether SolarCity can survive without tax credit:
“Absolutely. So for the most part of the U.S., there’s been two types of incentives: there’s been federal incentives and state incentives. The state incentives have almost disappeared. But yet we’ve been able to keep up with the cost reductions, to keep up with that state incentives declining. The federal incentive is going to go from 30 percent down to 10 percent, just like every other fossil fuel incentive out there, in 2017. If we reduce our cost by 5.5 percent per year, we’ll have a significant sustainable business very similar to what we were planning before the expiration.”
Elon Musk on whether SolarCity will provide for solar power for Tesla Motors Inc (NASDAQ:TSLA):
"It definitely is coming. And this is a little sad, but the reason we don’t have solar power right is that Tesla Motors Inc (NASDAQ:TSLA) is not yet a good enough credit. I know this sounds ridiculous. But that will be changing. So I think at some point next year, I’m confident we will have solar power on our factory at Tesla."