Elon Musk’s Solar Deal Has Become the Top Threat to Tesla’s Future

During a heated deposition this past June, Elon Musk finally seemed to admit that his harshest critics were right. Since forcing through the controversial 2016 purchase of SolarCity Corp., the struggling solar sales-and-installation business he co-founded with his cousins, Tesla Inc.’s chief executive officer has faced almost-constant criticism: The move was called a catastrophe for Tesla, a $2 billion-plus bailout of a debt-saddled company of which Musk himself was chairman and the largest shareholder. Despite plummeting sales and substantial layoffs in the solar division under Tesla after the merger, Musk has fervently defended the SolarCity acquisition, once calling it “blindingly obvious” and a “no-brainer.”

But in a stunningly rare moment of contrition, Musk expressed regret over the decision at his deposition, part of a class-action shareholder suit that’s gained momentum in recent months. “At the time I thought it made strategic sense for Tesla and SolarCity to combine. Hindsight is 20-20,” Musk said. “If I could wind back the clock, you know, I would say [I] probably would have let SolarCity execute by itself.”