In 2016, Tesla’s acquisition of SolarCity was a major boost for solar energy adoption in the United States. The acquisition allows Tesla to integrate its solar panel and battery storage products with its electric vehicles. Tesla also became one of the leading providers of solar energy products and services in the country.

Tesla was able to leverage its economies of scale to reduce the cost of several solar panels and battery storage for its customers. The act supported solar energy more affordable and accessible to a wider range of people.

The impact of the acquisition of SolarCity on its market share in the solar energy industry is quite mixed, leading to increased challenges for Tesla’s market share. The key points are as follows:

1. Initial Growth: The acquisition in 2016 led to initial growth in its solar installations. The integration of SolarCity’s sales and distribution channels with Tesla’s existing ones allowed for increased visibility and reach. Tesla’s solar installations saw a significant uptick in the immediate aftermath of the acquisition.
2. Market Challenges: The company encountered difficulties in scaling up the solar business and maintaining a strong market presence. Factors such as changes in the solar industry’s regulatory landscape, increased competition, and the phasing out of certain solar incentives in key markets impacted Tesla’s market position.
3. Shift in Focus: Tesla also shifted its focus towards its electric vehicle business, particularly the production and delivery of the Model 3 and subsequent models. This shift reduced the emphasis on solar energy, leading to a decline in Tesla’s solar installations and market share.
4. Reinvigorating Solar Efforts: Tesla made efforts to revitalize its solar business by introducing new solar products, such as Solar Roof, aimed at providing innovative and visually appealing solar solutions. Tesla also implemented various sales and marketing strategies, such as online ordering and streamlined customer experiences, to re-engage with the solar market.
5. Market Competition: The solar energy industry has become increasingly competitive, with numerous players offering solar products and installation services. Tesla faces significant competition from both established solar companies and newcomers in the market.

The impact on Tesla’s market share is significant due to the competitive landscape in the solar industry.

Sources:- Tesla, CNBC