Is there a bright future ahead for Tesla's solar factory?
Tesla's latest earnings report barely mentions the company's South Buffalo solar factory. CEO Elon Musk said, in a letter to shareholders, "We are in the process of improving many aspects of this business to increase deployments." But according to Tesla its solar energy deployments fell 65% in the second quarter.
The state invested $750 million in the factory and, in exchange, the company promised to create more than 1,400 jobs by April 2020. But so far Tesla employs about half that many local workers.
Gary Keith, a regional economist with M&T Bank, says there is a lot volatility built into Tesla and all anyone can do is stay tuned.
"There's no guarantees in any of these tech investments. We've seen success stories and we've seen others that haven't met their expectations. And I think it's still a little early as far as Tesla. If they could get their car production challenges behind them, in the next year, I think they then could refocus in things like solar and if not maybe bring other things from the Tesla portfolio to Buffalo," Keith said.
Tesla is reporting a $408 million loss, but revenues increased 47% from a year ago to $5.2 billion. The company also generated $614 million in cash during the quarter. However, Tesla's stock dropped another 11% in extended trading.
If the company fails to meet its hiring goal at the South Park Avenue plant, the state could impose more than a $41 million penalty.