Tesla Powerwall Production Delayed Due to Continuous Chip Shortage
Just this year, Elon Musk discussed in court that the global chip shortage halted Tesla Powerwall production. He revealed that the demand for Tesla Powerwalls stands around 80,000 units. However, the company won’t be able to produce even half of that number this quarter.
Shareholders decided to sue Tesla alleging that Musk pushed for the SolarCity deal. They believe that it was improperly involved when he should have been fully rejected. Moreover, shareholders claimed that he acted for his own best interests rather than Tesla shareholders’ best interests at the time.
In this article, we will find out the purpose of the Powerwall and why Tesla cannot produce this product on time.
What Is a Powerwall and Why Do People Buy It?
Powerwall is a solar battery storage system that can keep your home powered, which is possible through outages. Moreover, it helps in reducing reliance on the grid. With Powerwall 2, they can provide twice the energy density of the original.
Tesla Powerwall has grown in popularity because of its benefit: energy independence. With Tesla’s product, you can stop depending on the grid to store energy from solar. More than that, Powerwall helps with a significant decrease in the monthly electric bill. Another reason why consumers like Powerwall is because they can minimize their carbon footprint. If you are an advocate of the environment, switching to solar panels and utilizing solar batteries can help. You can significantly reduce your consumption of non-renewable sources.
In conclusion, if you opt to minimize electricity bills and carbon footprint, a solar battery is the key.
Tesla Powerwalls Announcement Before SolarCity Deal
Five years ago, Elon Musk announced to investors about Tesla’s acquisition of SolarCity. It is the top U.S. solar panel installer and he was optimistic that they can help them with their Powerwall production. After his announcement, more than a year, he acquired SolarCity. With that, he prepared his company for possible troubles because of SolarCity’s faltering financial health.
At that time, Tesla launched its energy business. They showcased their Powerwall and energy storage products. They wanted to create more sustainable products, such as electric cars. Elon Musk pitched energy storage systems that use reliable renewable energy and can also be used as storage for solar energy during the day.
During his presentation at that time, Elon Musk pointed to Powerwalls used in the auditorium, mounted flat on a wall. Elon Musk also highlighted that they could not create a well-integrated product if SolarCity was a separate company.
However, this year, Musk appeared in the Delaware Court of Chancery as the defendant. The shareholders of Tesla filed claiming that he acquired it as a bailout because SolarCity was founded by Musk’s cousin. During the trial, Musk emphasized that he did not exert any influence over Tesla’s board. Furthermore, he told that the deal was a stock-for-stock transaction. And it didn’t benefit him financially. Musk said that the acquisition of SolarCity was part of Tesla’s plan to go beyond electric-vehicle production into clean-energy solutions.
The Price Hike of Powerwall and Tesla’s Backlog of 80,000
Tesla did not disclose the breakdown of their solar and energy storage products like how they have shown in Megapack. Early this year, Tesla suddenly increased prices for their solar installations. More than that, they require their customers to purchase Powerwall along with solar panels or solar glass roof tiles. He reiterated that they will not sell a solar house without a Powerwall.
Even though Tesla is facing struggles, there is a high volume of sales due to its promising product. Consequently, they cannot provide and meet the demand because of the chip shortage. With that price hike and failure to meet the demand, more unhappy buyers filed lawsuits in California and Pennsylvania. Some of them have already lined up for financing, while some have changed their house to prepare for Tesla solar installations.
Tesla has been known for its innovative products including its solar energy storage. Reasons why people buy from the company include its brand, benefits, and innovative features. While any business can encounter struggles, Tesla seems to fail in meeting the market demand. But according to Musk, this is all because of the global chip shortage.
There are a lot of issues circulating around his decisions of acquiring SolarCity. Although they may be directly or indirectly related to the delay of production, he ensured that he can deliver 30,000 to 35,000 this quarter given the best scenario. He is also reportedly in talks to purchase computer chips to combat an industry-wide shortage. Hopefully, they can resolve their problems with Tesla Powerwall production and continuously deliver their products.
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