SolarCity’s solar panel factory in Buffalo is expected to start production this summer, Tesla informed investors and analysts on Wednesday in its first update since it bought the solar energy company in November. The solar roofing tiles which will be one of the factory’s flagship products will hit the market by the end of the year, according to Buffalo News.
SolarCity in cost-cutting mode
This summer, the solar panel factory is expected to start marking solar cells that convert sunlight into electricity in a solar panel. Panel production is set to start this summer as well. According to Tesla officials, solar roofing tiles are expected to be manufactured and ready for installation by the end of 2017.
During a conference call on Wednesday, Tesla’s CFO Jason Wheeler stated, “A lot of the equipment already exists and has been purchased. It will start scaling at the end of this year.”
The CFO was clearly referring to the solar roofing product that the electric car maker introduced in October, notes Buffalo News.
Tesla’s SolarCity update further disclosed that the company has shifted into a cost-cutting mode with the solar energy segment, which has been plagued by a steadily increasing cash drain and growing losses.
“We’re prioritizing cash preservation for that business,” Wheeler said.
Tesla said it is making efforts to reduce SolarCity’s high customer acquisition costs by minimizing advertising and selling solar energy products in the Tesla stores. Customer acquisition costs are the main factor in the overall cost of making and installing a rooftop solar energy system, notes Buffalo News. The company said it plans to continue moving away from SolarCity’s original business model. Instead, it is shifting towards a business model in which customers buy their rooftop solar systems up front.
Mixed Q4 earnings for Tesla
The company also reported mixed fourth quarter results after the market close on Wednesday, beating on revenue but missing on the bottom line. However, its shares rose after hours, as it said the Model 3 is still on track. In after-hours trading on Wednesday, Tesla stock was up more than 2%.
Beating the consensus estimate of $2.2 billion, the electric car maker and solar firm reported revenue of $2.28 billion, up 88% year over year. The company posted a per-share loss of 69 cents, while analysts had expected a 42-cent loss. In the year-earlier quarter, it lost $2.02 a share.
On Wednesday, Tesla shares closed down 1.4% at $273.51. Year to date, the stock is up almost 28%, while in the last year, it is up more than 64%.