Elon Musk tells SolarCity trial that Tesla would ‘die’ if he wasn’t CEO

Elon Musk told a court that Tesla’s more than $US2 billion ($2.67 billion) acquisition of SolarCity in 2016 wasn’t a bailout of the then-failing solar provider and got combative with the attorney for plaintiffs on the first day of trial testimony in a legal fight over the deal.

At the start of what’s expected to be a two-week trial in Wilmington, Delaware, Musk responded to a question from his own lawyer by saying he “definitely” did not have any sway over the company’s board when it approved the SolarCity deal. Shareholders suing the Tesla chief executive officer claim he got the company to essentially rescue another firm that he also controlled.

At one point, Musk said he has tried “very hard not to be the CEO of Tesla, but I have to or frankly Tesla is going to die”. Musk has been the CEO of the company since 2008.

Elon Musk said in court that he “definitely” did not have any sway over the company’s board when it approved the SolarCity deal.Credit:AP

Musk, wearing a black suit and tie, stayed cool during three hours of testimony on Monday, local time. He was first questioned by his own attorney, Evan Chesler of Cravath, Swaine & Moore LLP.

The Tesla CEO denied vowing to retaliate against any director who voted against the acquisition and said he had no control over their compensation or board committee assignments. Musk said Tesla’s now-chairwoman Robyn Denholm set the final price and deal terms for the SolarCity buyout.

The question of who controlled the SolarCity purchase is a key part of the trial. Investors and pension funds who are leading the suit allege that Musk and Tesla’s board breached their fiduciary duties when they orchestrated the acquisition of SolarCity, an installer of rooftop solar panels. In June 2016, Musk was the chair and the largest shareholder of both companies when he stunned Wall Street by announcing that Tesla would acquire SolarCity in a deal he later called a “no brainer”.

The plaintiffs are trying to persuade Delaware Chancery Court Judge Joseph Slights III that Musk used his outsize influence and reputation to steamroll Tesla directors into approving the buyout and to manipulate a majority of shareholders to vote for it. Musk is the lone defendant in the case, which has been delayed by the pandemic; the rest of the board settled for $US60 million last year.

The Tesla board kept Musk updated on the basic progress of the deal, but he otherwise recused himself, Musk testified. He scoffed at the idea that he controlled Tesla’s shareholders.

“I don’t think it’s possible to control” big institutional investors like Fidelity and T. Rowe Price, he said.

When questioned by Randy Baron, the attorney for the plaintiffs, things got testy as the two tangled over time lines and SolarCity’s profitability after the acquisition.

Shortly after noon, Baron asked Musk if he “rage fired” anyone. Musk is widely known for being a demanding and exacting boss, and executive firings are legendary within the company.

Musk denied “rage firing” anyone, but said he gives “clear and frank feedback which may be construed as derision”. Baron then played several clips of Musk’s deposition highlighting acrimonious exchanges between the two.

“That was openly derisive not for some benefit of Tesla, but because you didn’t like what was happening correct?” Baron asked.

Musk said he doesn’t respect Baron because he first worked at a law firm, Milberg Weiss, whose partners were imprisoned for paying kickbacks to expert witnesses and plaintiffs, and later went to another firm, Robbins Geller, where partners were also jailed.

“You were mentored by criminals,” Musk said. “Then you continued to be mentored by criminals and that is why I do not respect you. I think you are a bad human being.”


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