Climate Changed
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.
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.