OCTOBER 2019 VANITY FAIR 115
(Tesla argues
that the company is now responsible for all
5,000 jobs, instead of being able to fulfill
them through suppliers.) The governor’s office
declined to comment on who authorized the
changes, and state officials have yet to provide
any public explanation as to why they opted to
let a big corporation like Tesla off the hook.
In fact, the Buffalo deal turned out to
have been tainted by corruption from the
very start. Just one day after Tesla finalized
its acquisition of SolarCity, Preet Bharara,
then the U.S. attorney for the Southern
District of New York, announced criminal
charges against a handful of Cuomo staff-
ers for rigging the construction bids for the
Buffalo Billion program to favor the gover-
nor’s campaign donors. The man tapped by
Cuomo to oversee the taxpayer subsidies,
as well as a leading donor who received a
$225 million contract to build out the Buffalo
factory, were both convicted last year of con-
spiring to rig the bids.
Lyndon and Peter Rive have both left Solar-
City, and the company’s original business of
installing solar roofs has all but evaporated.
The company once controlled two-thirds of
the residential market; now, according to the
consulting firm Wood Mackenzie, its share is
less than 7 percent. In the second quarter of
this year, SolarCity installed only 29 mega-
watts of solar panels—far below the 10,000
megawatts in annual installations that Musk
had promised. “Total implosion” is how one
SolarCity insider describes it.
Across the street from the factory in Buffalo
stands a small building that houses a coffee
shop and an office space. Both were built to
cater to the plant, says Robinson, the Buffalo
Ne ws editor. The coffee shop is surviving, but
the office space is vacant. What few jobs do
exist at SolarCity barely compete with the
local grocery store. “For $750 million, we’re
getting jobs that pay $2 an hour more than
Aldi’s,” says Robinson.
In a statement to Vanity Fair, Tesla argues
that its jobs in Buffalo are competitive, espe-
cially when benefits and equity are factored
in. It says it has expanded its operations at the
factory to include “some of our most innova-
tive and pioneering products.” And it accuses
the magazine of presenting a “one-sided
view with cherry-picked sourcing aimed at
feeding into the fear, uncertainty, and doubt
being circulated about Tesla every day by
those looking to gain from Tesla’s losses.”
But the level of secrecy surrounding the
SolarCity plant may offer an additional indi-
cation of how bad things are. Tesla refused to
allow me to take a tour, and former employ-
ees say a rare media event at the factory last
fall was highly scripted. “They spent more
time and resources trying to fabricate what
people saw than they do making anything,”
says Witherell, who worked there at the time.
“They told employees to pretend we were
busy.” A story aired last February by News 4
Buffalo described the shop floor as “torpid,”
with idle employees milling about. “They say
they are in ‘ramp up’ mode,” says Scott, the
former employee. “But this isn’t even start-
up mode. What company spends two and a
half years starting up something they were
already supposed to be the best at?”
Last April, not long after he placed his late-
night call to Scott, Elon Musk finally paid his
first-ever visit to Buffalo. There was no press
release, no triumphant post on social media,
no meeting with reporters. Local authorities
were in the midst of performing the genu-
ine engineering feat of dismantling what’s
known as the “ice boom”—hundreds of steel
pontoons, spanning over a mile and a half,
that keep the massive amounts of ice on Lake
Erie from floating down the Niagara River
and jamming up hydropower turbines. After
the visit, Musk continued his upbeat assess-
ment of production. “We are looking forward
to scaling up significantly through the bal-
ance of this year and into next,” he said.
Musk’s other proclamations in recent
months have been far grander. He haspromised that by next year, Tesla will be pro-
ducing self-driving cars—and deploying a fleet
of 1 million robotaxis. He has claimed that
Neuralink, his secretive start-up, has devel-
oped a “thread” that can be inserted into the
human brain, merging our minds with artifi-
cial intelligence. And he is seeking approval
to build an underground “hyperloop” that
will whisk passengers between Washington,
D.C., and Baltimore in 15 minutes.
When Tesla bought SolarCity, it said the
deal would “add more than half a billion dol-
lars in cash to Tesla’s balance sheet over the
next three years.” But it appears to have had
the opposite effect. “I think it’s a big source
of the cash-flow deficit,” says one longtime
analyst. “I think it is a big thorn inside of
Tesla.” The company has paid back some
of SolarCity’s debt, including the Solar
Bonds owed to Musk and SpaceX. But this
fall, another $556 million is coming due. In
a characteristic tweet, Musk once vowed
he would “personally” repay the SolarCity
debt if need be.
There may be another cost. By next April,
Tesla is required to start paying an annual
fine of $41.2 million if it fails to employ 1,460
people at the Buffalo plant. Tesla says it cur-
rently has 636 employees statewide in New
York, including 329 at the plant, and that it
has invested almost $400 million in New
York. Engle, the TSLAQ member, argues that
Tesla cannot afford to admit that SolarCity
has been a fiasco, because doing so would
open the company to significant liability in
the ongoing lawsuit over the acquisition.
Officials in New York, meanwhile, appear
to be taking belated steps to document what
is really happening in Buffalo. Last spring, the
state announced that it was auditing all of its
high-tech programs, with a focus on Tesla.
Everyone in Albany, says the longtime lob-
byist, has accepted that the Buffalo plant is
a “disaster”—a poster child for why govern-
ment giveaways to big companies don’t work.
But the official who took credit for the
deal with Tesla—the man who championed
the company as a Rust Belt savior—stands by
his decision to place his trust in Elon Musk.
Governor Cuomo, who paid his own visit to
Buffalo last spring, declared that he’s per-
fectly pleased with the progress at SolarCity.
“They’re ahead of schedule,” he said.Elon Musk
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