elevators that Le Corbusier once called
the “magnificent first fruits of the new
age”—and which supplied the nation
for half a century, before they were ren-
dered irrelevant by the St. Lawrence
Seaway—still loom over the horizon, too
costly to demolish. The blackened shell
of the warehouse at the old Bethlehem
Steel complex, destroyed by fire a few
years ago, punctuates the river like an
angry exclamation point. Once one of
the nation’s largest cities, Buffalo’s emp-
ty streets feel oddly discordant. “Here, if
you have to sit through a traffic light even
once, you have an aneurysm,” says Dave
Robinson, an editor at the Buffalo News.
Now, under Cuomo’s plan, Buffalo’s
massive steel plants would be replaced
with the sun itself. In September 2014,
the governor toured the SolarCity site.
The smiles were big and the words were
grand. The success of the plant, Cuomo
proclaimed, was “of critical importance
to the United States’ economic competi-
tiveness and energy independence.”
SolarCity was founded by two of
Musk’s cousins, Lyndon and Peter Rive,
who grew up with him in South Africa.
Musk, who put in $10 million, was the
largest shareholder and chairman of
the board. The initial idea, the Rives
explained, was not to be a manufacturer
but rather to control the entire consumer
experience of going solar, from sale to
installation, thereby driving down costs.
For a time, SolarCity was a hot stock,
growing almost tenfold from its public
offering in 2012 to its peak in early 2014.
As is common with Musk’s ventures,
SolarCity professed to be focused on
changing the world. “Everything was
very motivational,” says a former execu-
tive. Some workers, taking the ethos to
heart, sported SolarCity tattoos.
But the initial success of the compa-
ny’s stock masked some difficult reali-
ties. SolarCity’s business model was to
front the costs of installing solar pan-
els and allow homeowners to pay over
time, which created a constant need for
cash. That required raising money from
outside investors, often big banks, who
were then entitled to the first chunk of
the payments homeowners made—leav-
ing SolarCity in a never-ending scramble
to raise more debt. The real engineering
that took place at SolarCity, in short, was
financial, not environmental.
On the consumer side, SolarCity was
plagued by complaints about mislead-
ing sales tactics and shoddy installa-
tions. As the problems mounted, some
workers began to feel manipulated by
the company’s talk about being a force
for good in the world. “I turned a blind
eye to a lot of the silliness because of
the idealism,” says one former senior
employee. “I don’t know when the Rubi-
con was crossed, but there were micro-
crossings every day.”
By 2014, several insiders say, the board
was also growing concerned. The compa-
ny imported most of its solar panels from
China, and it looked like demand would
soon outpace supply. Because Musk had
a reputation as a manufacturing genius,
the board decided that SolarCity needed
to start making its own panels—a huge
shift in its business model. “Installing
and selling solar has almost nothing to
do with manufacturing,” says a former
solar-industry executive. “It’s like a car
dealer saying it’s going to make cars.”
In June 2014, SolarCity bought Silevo,
a solar-panel manufacturer that had
struck a deal with New York to build a
factory in Buffalo. On a conference call,
Musk boasted that the deal would enable
SolarCity to install tens of gigawatts of
panels every year—far beyond the com-
pany’s peak annual run rate of about
one gigawatt. He spoke as if the technol-
ogy were already proven. On its website,
SolarCity predicted it would “achieve a
breakthrough” in solar-power pricing
thanks to “massive economies of scale.”“It was shoot first and aim later,” says
the former senior employee. “There was
a lot of machismo going on: bigger, better,
badder, faster.”
By the time Cuomo visited the site
three months later, Silevo’s smallish
deal had metastasized. The state prom-
ised to spend $350 million to build a
factory and another $400 million on
equipment specified by SolarCity. The
company would get a 10-year lease on
the facility—for just $1 a year. In return,
it promised to employ at least 1,460 peo-
ple in “high-tech” jobs at the factory, hire
another 2,000 to support the sale and
installation of solar panels in New York,
and help attract an additional 1,440 “sup-
port jobs” in the state. Once it achieved
full production, the company pledged, it
would spend some $5 billion in New York
over the following decade.
“It was sold as a perfect marriage,”
says the former senior employee. “The
area around the factory is terrible, and I
remember thinking: Wow, we are going
to save the town where steel was made.”
Cuomo too was hooked. “He was enchant-
ed with the idea of Elon Musk in Buffalo,”
says a longtime lobbyist in Albany. “I
think he actually thought Musk was the
next Dalai Lama.”E
ven then, to those who looked
closely, the cracks at SolarCity
were becoming apparent. In
2014, key executives had started to leave.
The Rives began to sell stock. SolarCity’s
debt was soaring, and the yield on its
bonds hit double digits, a sign that the
market thought the company was in
trouble. Goldman Sachs, one of Musk’s
major bankers, called SolarCity the
“worst positioned” company for capital-
izing on future growth in the solar sector.
One of the few things shoring up the
company’s stock, according to a former
investor, were the constant rumors that
Musk was somehow going to bail it out.
In reality, the situation was even uglier
than outsiders knew. As SolarCity strug-
gled to raise money from institutional
investors, it began offering individuals a
chance to buy what it called Solar Bonds.
(“Now you can get paid while driving the
solar revolution,” the marketing material
said.) But there were few takers—so oth-
er parts of the Musk empire took up the
slack. According to the shareholder law-
suit, SpaceX acquired $255 million of the
bonds. Musk himself bought $75 millionWHERE THE SUN
DON’T SHINE
Tesla promised
to create 1,460
jobs at its solar
factory in Buffalo.
It currently
employs only 329.
In willing a
reality into
existence,” says
a former insider,
Musk “might
not stick to the
facts.
OCTOBER 2019 VANITY FAIR 109