In the indictment, Walmart Inc pointed out that Tesla, Inc. 's acquisition of Solarcity in 2016 was a "rescue operation". Before the announcement of the acquisition, Solarcity's financial performance seriously deteriorated and key indicators were in jeopardy, with a loss of $820 million for the whole of 2016, up from $765 million in 2015.

Recently, an indictment by Walmart Inc against Tesla, Inc. has once again raised concerns about the electric car maker, claiming that Tesla, Inc. had "extensive and systematic" negligence in the quality control of his solar panel products. resulting in a series of fire accidents. Affected by this, Tesla, Inc. 's share price fell sharply for two consecutive trading days.

Tesla, Inc. 's solar panel business stems from Solarcity, which he acquired in 2016, when the $2.6 billion acquisition was questioned as a personal financial rescue for Musk because the company was inextricably linked to Musk himself, as confirmed by Walmart Inc's indictment.

In the indictment, Walmart Inc pointed out that Tesla, Inc. 's acquisition of Solarcity in 2016 was a "rescue operation". Before the announcement of the acquisition, Solarcity's financial performance seriously deteriorated and key indicators were in jeopardy, with a loss of $820 million for the whole of 2016, up from $765 million in 2015.

Musk and his family will face significant financial losses if the company is on the verge of bankruptcy because Musk and his cousins, as Solarcity management cousins, hold a large amount of Solarcity stock and bond assets. By issuing Tesla, Inc. stock to buy Solarcity, replacing the pressurized Solarcity stock with Tesla, Inc. stock, which rose well at that time, and telling the story of the coordinated integration of upstream and downstream of new energy, Musk successfully realized a financial self-rescue.

However, after the completion of the acquisition, from a practical financial point of view, Solarcity not only failed to bring actual synergy to Tesla, Inc. to reduce costs, but became a "burden" for Tesla, Inc..

Although the consolidation of the Solarcity solar panel business brought an increase of US $934 million to Tesla, Inc. 's operating income for the whole of 2017, the overall gross profit margin dropped to 19% from 23% in the previous two years, which can be seen as a drag on Tesla, Inc. 's overall profitability after being incorporated into the solar panel business.

In addition, the integration of the Solarcity business has also put Tesla, Inc., who is already heavily in debt, under greater debt pressure. As of the end of 2017, Tesla, Inc. 's total outstanding debt totaled US $10.167 billion, of which the total debt related to the solar panel business reached US $1.2 billion, the vast majority of which were bonds issued by Solarcity backed by long-term leases signed by customers. Tesla, Inc. 's annual financial report for 2017 pointed out that interest expenses increased by US $272 million in that year, an increase of 137% over the same period last year. This part of the increase in interest expenses mainly comes from the consolidated statement of Solarcity. By the end of 2018, Tesla, Inc. 's total debt further rose to $10.9 billion, of which the debt related to solar panels continued to expand to $1.4 billion.

In an effort to cut costs, Tesla, Inc. closed 12 photovoltaic facilities in nine states in 2018 and laid off a large number of Solarcity employees. Since taking over the Solarcity business, Tesla, Inc. 's market share of solar panel business has been shrinking, completing only 29 megawatts of new installations in the second quarter of this year, lagging behind industry-leading SunRun and Vivint Solar with 103MW and 56MW respectively, and a far cry from the 200MW installed by Solarcity in early 2016. Recently, in order to boost the solar energy business, Tesla, Inc. launched an open-ended solar panel rental service and offered a more flexible pricing scheme based on the size of the roof, but while trying to boost revenue, there is still no sign of improving overall profitability.

As Tesla, Inc. revealed in the risk tip in his 2017 annual report, the company "has not had the experience of integrating a company the size of Solarcity in the past, and if the process of integration is more expensive than originally expected, it will not be able to reap the expected benefits from mergers and acquisitions. "

As a matter of fact, the acquisition of Solarcity not only failed to create an energy group with integrated upstream and downstream energy, as Tesla, Inc. claimed, but also brought financial drag on Tesla, Inc. 's main electric vehicle business.