Tesla's solar business had its best quarter since 2018 during the final months of 2020, according to CEO Elon Musk. After turning his attention to Model 3 production for a time, Tesla now has "a little more bandwidth" to focus on solar, Musk told investors during Wednesday's Q4 earnings call.
Tesla's cost-cutting strategy continues, and a key component of that strategy is "achieving better integration between the Tesla Powerwall and the Tesla Retrofit Solar and Tesla Roof." Telsa should have its new "market-leading" cost structure "really dialed in this year," Musk said.
The company also aims to achieve its pricing and vehicle range targets for battery production — increasing range by 50% and cutting costs in half — over the next three to four years. "[We'll] give ourselves a little room," Musk said.
To reach the top of the solar industry, Tesla has joined the race to the bottom — at least as far as solar installation costs are concerned.
Tesla as a whole enjoyed its sixth straight quarter of profitability during the fourth quarter of 2020, according to Chief Financial Officer Zachary Kirkhorn, marking the first full calendar year of profit for the company. Tesla's solar business in particular saw "tremendous growth quarter-over-quarter last year," Musk said, and Q4 was the solar segment's best since 2018.
The company's solar strategy remains unchanged since Tesla rolled out an automated online ordering system with standardized installation packages in early 2020. By streamlining the installation process, Kirkhorn said, Tesla hopes to achieve "industry-leading pricing," ultimately driving greater growth in residential installations.
"I think it will not be long before Tesla is, by far, the market leader in solar," Musk said.
Battery manufacturing, however, remains a key sticking point for Tesla and for the industry at large, said Musk, who explained that Tesla has not pursued introducing new electric vehicle models because there simply aren't enough battery cells available to create them.
"It would not make sense for us to do the Semi right now," he said, "but it will absolutely make sense for us to do it as soon as we can address the cell production constraint."
Musk noted that Tesla is on track to achieve 30% of its targeted cell production capacity in 2022.
Musk said he remained committed to his original vision for Tesla, which he said "from the beginning, has been to accelerate sustainable energy" through a three-pronged approach tied to solar development, energy storage and electric transportation.
"If we have those three things, we've got a very bright future with respect to energy and the environment," Musk said. There's "a long way to go on that, and so I'm still very much fired up to work on that."
He said that while the world will require "a large volume of stationary battery packs" to compensate for the intermittent nature of wind and solar, he also supported the use of nuclear fission.
"I actually think nuclear fission is, with a well designed reactor in a situation that is not subject to bad weather or seriously bad weather, is actually a good thing," he said.
However, Musk panned the idea that hydrogen-fueled trucks could present competition for Tesla's own electric designs.
"I'd just say use propane or something like that, or methane — those will be way better than hydrogen," he said. "Having it be a fuel cell just adds even further complications to the situation. It's just crazy basically, and we're extremely confident that we could [have] long-range trucking with batteries. Basically, we do not see any issues with creating a compelling long-range truck with batteries. The problem is cell supply; cell supply is the only thing."