- Tesla has announced that it will waive the $1,500 removal fee for its solar roof. The offer will be good until the end of September.
- The prohibitive removal fee acted as a dampener for some consumers. Furthermore, there have been several news reports of fires at Tesla solar panels. Walmart sued it for the alleged solar panel fires. Amazon also reported a fire.
Tesla’s solar panels
Tesla (TSLA) has announced that it will waive the removal fee for its solar panels. Last month, when Tesla relaunched its solar roof, it said that customers would have to pay $1,500 to remove it. However, many consumers pointed out that the fee was prohibitive. CEO Elon Musk called the solar panels a “money printer on your roof.” TSLA has taken several measures to boost its energy products business. Musk deemed 2019 the “year of the Solar Roof.”
Tesla first launched its solar roof in 2017. The product faced production-related issues for a considerable period of time. In July, Musk claimed that the company had resolved the production hiccups. However, Tesla solar panels were hit by another piece of bad news. Some users complained of fires at Tesla installed solar panels.
Tesla solar panel fires
Last month, Walmart (WMT) sued Tesla after fires at the solar panels atop its stores. Amazon (AMZN) also reported a fire at a Tesla solar panel. Last month, a German car rental company faulted Tesla for its service quality. TSLA fans dismissed it as a case of a vendetta by a foreign company. However, in the case of the company’s solar roofs, US companies have been reporting the fires.
The solar panel fires brought negative publicity to Tesla. With the removal fee waiver, TSLA might win over a few customers, especially fence-sitters. Musk tweeted, “Without the removal fee, Tesla Solar is unequivocally a guaranteed, instant money printer, producing $300 to $1000 per year (in after tax income!).” The removal fee waiver does make the product an attractive proposition.
The other side
However, we need to consider another factor. As for its cars, Tesla often says that its production is constrained. This basically means that demand isn’t a worry for the company. However, last month, Tesla brought back free unlimited Supercharging for a limited period in an apparent bid to shore up Model S and X sales. In the case of solar panels, we can also infer that the inherent demand hasn’t been that strong. Otherwise, there would be little reason for Tesla to waive the removal fee. Last month, while relaunching the solar roof, Musk admitted that the company wouldn’t be making profits on the product.
With the withdrawal of the removal fee, Tesla’s solar roof’s current financial viability will be even lower—at least for now. But profits have never been a top priority for TSLA and Musk. So far, the company has posted profits in only three quarters since being listed as a separate company. With that said, it’s not all gloom and doom. Despite all the resources at their disposal, established automakers haven’t been able to dent TSLA’s dominance in the US electric vehicle market. Read Tesla: Are Peers Losing the Electric Vehicle Race? for more analysis.
TSLA has established itself as a kind of gold standard when it comes to electric vehicles. Established automakers might be giving free advertisement to the company with every new electric vehicle launch. Read Are ‘Tesla-Killers’ Free Advertising for Tesla? for more insight.