Dive Brief:

• Home Depot’s much publicized deal to sell Tesla Powerwall solar panels and Powerpack battery packs will not be renewed after less than a year, Tesla CEO Elon Musk said Tuesday in an email to employees, according to Business Insider. This is part of Tesla’s move to cut 9% of its employees. Musk posted the email on Twitter after it leaked to the press.
• The majority of Tesla employees who had staffed displays at Home Depot will be allowed to work at the company’s own stores where it sells electric cars. Tesla will now make its 300 stores and website the focus of energy product sales, Musk said. The Home Depot partnership will remain in place through 2018 and Home Depot will continue to offer solar products, including those from other manufacturers, a spokesperson for the retailer told USA Today.
• Tesla bought SolarCity for its solar panel business in 2016 for $2.6 billion. It then made the solar company’s products part of its energy business, Business Insider said. Tesla manufactures and installs solar panels as well as battery packs for businesses, homes and government utilities, while also offering solar roof tiles. Tesla had announced plans to sell its products in over 800 Home Depot stores earlier in the year.

Dive Insight:

There’s only so long a for-profit startup company can continue not making money, and that time has evidently come for Tesla. 

The company is in the midst of "a comprehensive organizational restructuring" following several years of growth and evolution, Musk said in the email. It is addressing duplication of roles and job functions, mainly in the ranks of its salaried employees, and not production workers. The layoffs "will not affect our ability to reach Model 3 production targets in the coming months," Musk said. Tesla has about 46,000 employees, and plans to lay off 4,000, according to Business Insider. The Model 3 is an entry-level Tesla car which is deemed crucial to the company’s future, USA Today said.

Musk has predicted that Tesla will be profitable by the end of the year and, to achieve more important priorities, some things – and people – had to go. One of those things was the Home Depot program.

"Given that Tesla has never made an annual profit in the almost 15 years since we have existed, profit is obviously not what motivates us. What drives us is our mission to accelerate the world’s transition to sustainable, clean energy, but we will never achieve that mission unless we eventually demonstrate that we can be sustainably profitable," Musk said in the email.

Home Depot has until the end of the year to find replacements, but no other solar brand will likely have the same cachet as Tesla. However, higher gasoline prices are usually good news for alternative energy sources. They are expected to be 14% higher this summer compared to last year, reported Forbes, so Home Depot is motivated to continue selling solar panels and batteries.

Home Depot is investing in the future of its company. The retailer said recently it is planning to hire over 1,000 technology employees this year, for a total of 2,800. The jobs will be in Atlanta, Austin and Dallas, and will be in product management, user experience design and software, and network engineering. The company has an $11 billion long-term investment plan to keep Home Depot ahead of its online competition, like Amazon. Home Depot also has launched a $1.2 billion program aimed at improving its outbound delivery system and hopes to offer next-day deliveries to all U.S. customers by 2022.