SolarCity Is Being Sued for Intellectual Property Theft

In a lawsuit filed in San Francisco on Monday, the parties accused SolarCity of gaining undue advantage of Cogenra’s Shingling technology that helps in manufacturing high-efficiency commercially viable solarpanels.

SolarCity and its subsidiary Silevo misappropriated Cogenra’s trade secrets, manufacturing processes, and other intellectual property to give themselves a competitive advantage and head start in developing shingled-cell solar modules, Cogenra said in the lawsuit.

Tesla’s European Troubles Continue

When it comes to Tesla Motors (NASDAQ:TSLA), we continue to wonder if the company’s growth story is fully intact. One place where the company continues to struggle is Europe, where Model X sales are off to a poor start and Model S sales continue to lag last year. Now that the European Alternative Fuels Observatory has issued its latest monthly figures, we can get a glimpse of how Tesla’s Q3 is shaping up.

According to EAFO since the last update, 842 Model S units have been sold. However, that compares to 1,123 units in the same time frame for 2015, a drop of just over 25%. Through this update, Tesla has sold over 8,300 Model S vehicles, but as the chart below shows, this number continues to lag last year, and the divide is growing.

WHY TESLA’S SOLARCITY BID WILL FAIL

Gigafactory, Model 3 Implications

Tesla’s blog notes its Gigafactory-produced Powerwall home battery system dovetails with SolarCity-produced solar panels. But Goldfarb objects to “the hypothetical connection in that solar can charge a home battery during the day, and this then can be used by the electric vehicle at night — or both batteries could be used to sell back to the grid.” But solar generally doesn’t produce enough to power a home, he says. “And you can’t store power in your car battery during the day because the car is usually not there.”

Goldfarb also says the $4 billion Gigafactory in Nevada has been “a huge bet” and has experienced delays. “It is hard to see how its battery model will be profitable,” he says.

Musk says, according to Vox, that a SolarCity deal will not affect Tesla’s plan to sell its $35,000 Model 3 starting in 2017. But Goldfarb says the margins in this part of the market will be very tight. “General Motors has been promising a late-2016 launch of a 200-mile range Chevrolet Bolt EV, electric car,” he says. “Moreover, the electric car market is crowded in the midprice range. Nissan, Ford, BMW, VW, Fiat, Mercedes, Kia, Mitsubishi and Smart all produce cars in the segment.”

Not Mass-Market Suited

Given the above-noted factors, Goldfarb says Tesla’s mass-market and SolarCity-takeover ambitions appear out of line with Musk’s track record as a master and visionary. For example he’s been out in front of the self-driving revolution (though the self-driving car “is really just a toy right now, and this market is very crowded, too,” Goldfarb says). Tesla can and should focus on what it does best: high-end electric cars, Goldfarb says. “Tesla owners love their cars,” he says. “They should. These are wonderful automobiles.”

How Long Will It Take SpaceX to Return to Space?

Every minute that SpaceX must spend figuring out why its rockets are blowing up, instead of launching them, is time the company is not collecting revenue, not earning profits, and not making progress toward Elon Musk’s goal of amassing enough money to finance a manned mission to Mars. So long as SpaceX is kept busy figuring out the SpaceXplosion phenomenon, there can be no relaunch of a “used rocket,” and no test launch of the company’s new Falcon Heavy rocket, either.

Meanwhile, SpaceX’s website continues to describe the company as “profitable and cash-flow positive” — even after two explosions and a combined seven months of inactivity over the past 15 months. The longer SpaceX remains grounded, though, the more questionable those claims will become.

Pointing at SpaceX explosion, ULA says Pentagon contracts shouldn’t just go to lowest bidder

The recent explosion of a SpaceX rocket should raise concerns about going with the lowest bidder on sensitive national security launch contracts, the chief of the United Launch Alliance wrote in a letter to top Pentagon officials this month.

Tory Bruno, ULA’s chief executive, urged the Air Force to postpone the deadline for bids, saying it should take time to explore the impact of SpaceX’s rocket failure while also taking into account both companies’ experience and past performance.

The Pentagon should have particular reservations, Bruno wrote, given that SpaceX has now had two of its Falcon 9 rockets blow up, which he said “serve as a reminder of the complexity and hazards intrinsic to space launch services.”

“This strategy defies both law and logic and puts hundreds of millions of taxpayer dollars and Warfighter mission needs unnecessarily at risk,” he wrote.

The letter is the latest salvo in one of Washington’s most contentious contractor feuds, one that has pitted a pair of the world’s most powerful defense contractors against a brash billionaire looking to shake up a calcified market by offering launches far more cheaply. And it’s the most glaring example yet of a competitor going after SpaceX for its pair of explosions.

Shareholders Go After Elon Musk’s SolarCity Bailout Plan

Tesla shareholders are suing the company because of its proposed merger with SolarCity, thus creating a challenge for Elon Musk to save the troubled solar energy company.

Tesla Motors Inc. (TSLA:NASDAQ) announced on Sept. 19 four shareholders filed lawsuits alleging that the Tesla board members “breached their fiduciary duties in connection with the proposed merger.” The shareholders also accuse both companies of unjustly enriching certain individuals through the deal.

“The lawsuits could prevent or delay completion of the merger and result in substantial costs to Tesla and SolarCity,” stated Tesla in a regulatory filing.

The lawsuits were filed by two pension funds (City of Riviera Beach Police Pension Fund and Arkansas Teacher Retirement System) and two individual shareholders (Ellen Prasinos and P. Evan Stephens), according to the filing.

“Other potential plaintiffs may also file additional lawsuits challenging the proposed merger. The outcome of any such litigation is uncertain,” Tesla stated.

In June, Tesla announced its plan to acquire SolarCity Corp. (SCTY:NASDAQ) in an all-stock deal, which valued SolarCity at $2.6 billion as of Aug 1. The merger is controversial, as Elon Musk is the chairman and largest shareholder of both companies and Lyndon Rive, the CEO of SolarCity, is a cousin of Elon Musk.

According to some analysts, the merger doesn’t make financial sense.

“Investors are likely to view this transaction as a bailout for SolarCity and a distraction to Tesla’s production hurdles,” stated Oppenheimer’s analyst Colin Rusch in his report after the merger announcement.

Based in San Mateo, California, SolarCity designs and installs solar panels at residences across the United States. The company sells long-term contracts and it is the market leader.

The company has frequently fallen short of its installation goals. Its operating expenses increased by 55 percent, causing the company to lose $533 million in the first half of 2016.

Even Musk can’t make SolarCity, Tesla deal make sense

Why should Musk be allowed to issue billions of dollars of Tesla stock, diluting existing shareholders and putting his whole enterprise at undue risk when he could so easily acquire what he wants merely by waiting for SolarCity’s bankruptcy, which will be along shortly? So Musk’s personal brand remains unsullied?

Tesla appointed two “independent” directors to make the go/no-go decision on recommending that Tesla complete its offer to acquire SolarCity. But how independent were they? One, Nancy Pfund, had been quoted saying Elon Musk “has always been a master of the universe in my mind.” Hardly a neutral appraisal. But 80% of Tesla’s stock isn’t held by Musk, and perhaps those investors will be the ones who collectively shout, “C’mon, man. Really?”

Harvard Business Review case studies are famous for their anodyne prose and non-judgmental tone. But if HBR ever publishes the facts and analysis of this proposed deal, in my opinion, it will be hard not to point out the sheer ridiculousness of the whole thing.

Stop Elon From Failing Again