SolarCity Corp (NASDAQ:SCTY) CEO Lyndon Rive spoke with FOX Business Network’s (FBN) Liz Claman and David Asman about their new deal with BMW i and how the company plans to become profitable. When asked whether there were any issues with the BMW i deal considering it is a competitor to SolarCity Chairman Elon Musk’s Tesla Motors Inc (NASDAQ:TSLA), Rive said “what’s really important is that we change the way we deliver energy and change the way we drive our cars,” and that “I am actually excited to see BMW come out, I am excited to see other car companies come out, and we’ll try to help everybody consume cheaper, cleaner energy.” Rive also talked about the company’s plans to be profitable saying “when you look at our financials, it’s a little confusing as we have to recognize the revenue over 20 years,” so from “a P and L perspective, it won’t show a profit for a very long time.” Despite that, Rive went on to say that from a cash flow perspective, “we were cash flow positive last year Q4, cash flow positive again Q2, this quarter, and then we plan to stay cash flow positive onwards.”
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SolarCity CEO on their new deal with BMW:
“We are very excited about this partnership. When someone buys an electric car, you now move the transportation costs onto the grid. With the Solar system, you can address the transportation costs and provide the home owner as well as the car with a low cost of energy and it also happens to be clean.”
SolarCity CEO on the 10% discount to the car buyer:
“Any BMW customer that buys an electric car, when they buy the electric car and they then decide to address their transportation costs with solar, SolarCity Corp (NASDAQ:SCTY) will come in, we install the solar system for free. There is no installation, there is no maintenance, we insure it and take care of everything. And then we sell them the electricity at a lower rate than they can buy from the utility. And then over and above that we are also giving BMW owners a 10% discount.”
SolarCity CEO on helping Tesla competitor BMW:
“What’s really important is the way we change the way we deliver energy and change the way we drive our cars. So what’s more important is to see more auto companies come out with electric vehicles. We really need to change the way we consume energy. So I am actually excited to see BMW come out, I am excited to see other car companies come out, and we’ll try to help everybody consume cheaper, clean energy.”
SolarCity CEO on their plans to be profitable:
“When you look at our financials, it’s a little confusing as we have to recognize the revenue over 20 years. Although we get the cash on day one, we have to recognize the revenue over 20 years. So from a P and L perspective it won’t show a profit for a very long time. But from a cash flow perspective, we will be cash flow positive, before costs, cash flow positive for this quarter. We were cash flow positive last year Q4, cash flow positive again Q2, this quarter, and then we plan to stay cash flow positive onwards. The business model works as follows. We buy all the equipment, we install all the equipment, and then the customer pays nothing. And then we sell them the electricity at a lower rate than they can buy from the utility. So from a homeowners perspective, you just get cheaper, cleaner energy, and you don’t have to worry about it. We are now supplementing their existing energy bill with SolarCity.”
SolarCity CEO on whether they can succeed without tax subsidies:
“This is really key, all energy has been highly subsidized in the stock. Solar energy, specifically in the US, the state rebates have declined at an aggressive rate. So if you look at states like California and Arizona, there used to be $3 a watt rebate, now it’s gone. For most of the states, there are no more state rebates, and Solar is still seeing massive adoption.”
