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Tesla Has a Problem, and It’s Not the Model 3

  • SolarCity ‘isn’t helping’ as Musk faces a litany of challenges
  • Panel installer’s obligations are impacting borrowing costs
The Tesla Motors Inc. and SolarCity Corp. solar roof in this handout illustration.

The Tesla Motors Inc. and SolarCity Corp. solar roof in this handout illustration.

Source: Tesla Inc.

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With all the car-making troubles that are hounding Tesla Inc. these days -- from the Model 3 bottlenecks to the furious cash burn -- it’s easy to overlook the company’s SolarCity headache.

But 16 months after Chief Executive Officer Elon Musk kicked up controversy by acquiring the solar-panel installer founded by two of his cousins, its obligations are a strain on Tesla’s finances. The $2 billion purchase came with a $2.9 billion debt load, and a chunk of that is soon coming due. That’s bad timing for a company churning through about $6,500 a minute and trying to stave off the need for another capital raise.