Amid rising competition in the residential solar market from rivals such as SunRun, Tesla CTO JB Straubel stated that Tesla is ramping up its efforts to bolster its energy business. According to Straubel, the reception of the public to products like the Powerwall 2 and Solar Roof tiles has been similar to the Model 3. Thus, Tesla is now doing what it can to increase its capacity to produce its energy products as fast as it can.
Straubel’s update to Tesla’s energy business came as a statement to USA Today, which recently published an article about the residential solar market in the United States. While the Tesla CTO did not provide the actual figures of its Powerwall 2 and Solar Roof reservations, Straubel did state that for now, Tesla is unable to keep up with deposits being put down for the products. Straubel also emphasized that Tesla is not in any way stepping back from the residential energy business.
“No one should see us as stepping back from solar. In fact, it’s the opposite. It’s like with Model 3. People have come flooding in and are waiting on the product. So now we’re aggressively ramping our capacity,” he said.
To address the demand for its residential products, Straubel stated that production of the Powerwall 2 is set to pick up later this year, while output for Solar Roof tiles is expected to accelerate in 2019. The Tesla CTO expects these initiatives to reduce the wait times for these energy products.
The Tesla CTO’s latest statement comes as an encouraging update to the company’s residential energy business, much of which has been under the news radar for most of the year. The first consumer installations of the Solar Roof began earlier this year, and reports emerged that Gigafactory 2 in Buffalo, NY is ramping up hiring, but apart from these, Tesla’s energy initiatives appear to be focused on large-scale industrial projects, such as its upcoming Powerpack farm in Victoria, and its virtual power plant in South Australia.
Tesla’s residential energy business in the United States took a blow last month, as well, with the company closing a dozen of its solar facilities across nine states in the country as part of its restructuring. Apart from this, Tesla also announced that it would not renew its partnership with Home Depot to sell its solar solutions and Powerwall 2 home battery storage units.
Regardless of these, the progress of Tesla’s industrial energy projects is indicative of the potential of its residential initiatives. Over the past year, after all, Tesla had all but proved that its battery technology is a feasible alternative to conventional power solutions. The warm reception to its big battery in South Australia, which continues to support the region’s embattled energy grid, is a testament to this.
Considering the competition from its local competitors, Tesla would have to increase its push for its residential energy business in the United States. Solar analyst for GTM Research Allison Mond, for one, stated that Tesla could see its market share shrink in the coming quarters due to competitors and the company’s lack of focus on its solar products. Nevertheless, Straubel stated that market share is not really Tesla’s focus for its residential energy business.
“We’re focused intently on the customer experience, not on having a higher market share. We’re looking at the bigger picture,” he said.
During Tesla’s 2018 Annual Shareholder Meeting, Tesla CEO Elon Musk mentioned that the company is getting closer to a battery breakthrough. Addressing shareholders, Musk stated that Tesla is on pace to hit a battery cell cost of $100 per kWh by the end of 2018 depending on the stability of current commodity prices. Considering Straubel’s mention of a ramp in Powerwall 2 production later this year, it seems like Tesla’s push into residential solar could happen just as the company hits a breakthrough in its battery technology.