Tesla to close a dozen solar facilities in nine states

LOS ANGELES/SAN FRANCISCO: Electric car maker Tesla Inc’s move last week to cut 9 per cent of its workforce will sharply downsize the residential solar business it bought two years ago in a controversial US$2.6 billion deal, according to three internal company documents and seven current and former Tesla solar employees.

The latest cuts to the division that was once SolarCity – a sales and installation company founded by two cousins of Tesla CEO Elon Musk – include closing about a dozen installation facilities, according to internal company documents, and ending a retail partnership with Home Depot Inc that the current and former employees said generated about half of its sales.

About 60 installation facilities remain open, according to an internal company list reviewed by Reuters. An internal company email named 14 facilities slated for closure, but the other list included only 13 of those locations.

Tesla declined to comment on which sites it planned to shut down, how many employees would lose their jobs or what percentage of the solar workforce they represent.

The company said that cuts to its overall energy team – including batteries to store power - were in line with the broader 9 per cent staff cut.

“We continue to expect that Tesla’s solar and battery business will be the same size as automotive over the long term,” the company said in a statement to Reuters.

The operational closures, which have not been previously reported, raise new questions about the viability of cash-strapped Tesla’s solar business and Musk’s rationale for a merger he once called a ‘no brainer’ – but some investors have panned as a bailout of an affiliated firm at the expense of Tesla shareholders.

Before the merger, Musk had served as chairman of SolarCity’s board of directors.

The installation offices that the internal email said were targeted for closure were located in California, Maryland, New Jersey, Texas, New York, New Hampshire, Connecticut, Arizona and Delaware.

The company also fired dozens of solar customer service staffers at call centres in Nevada and Utah, according to the former Tesla employees, some of whom were terminated in last week’s cuts.

Those employees spoke on condition of anonymity because making public comments could violate the terms of their severance packages.

“It’s been a difficult few days – no one can deny this,” a Tesla manager wrote in a seperate internal email, sent to customer service employees shortly after the cuts were announced. — Reuters