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Elon Musk said he probably wouldn’t support Tesla’s controversial SolarCity deal if he could go back in time (TSLA)

Tesla CEO Elon Musk likely wouldn't advocate for the electric-car maker's 2016 acquisition of the solar-panel company SolarCity if he could go back in time, he said in a June deposition obtained by PlainSite, an organization that advocates for transparency in the US judicial system.

Musk cited the difficulty of the early stages of production for Tesla's Model 3 sedan, which took significant resources away from Tesla's energy division for about 12-18 months, as the reason he probably wouldn't support the SolarCity deal again.

According to the deposition, Musk said, "at the time I thought it made strategic sense for Tesla and SolarCity to combine. Hindsight is 20/20. And if I could wind back the clock, you know, I would say probably would have let SolarCity execute by itself; would have let Tesla execute by itself and — But I just didn't realize how difficult it would be to do the Model 3 program. And so that was just a big distraction and sort of offset a lot of things by more than a year, year and a half maybe."

Musk later said that he still believes electric vehicles, solar panels, and energy storage are most effective as an integrated product, adding that SolarCity was "far and away" the best solar company Tesla could have bought at the time. But, Musk said, he overestimated how much progress Tesla had made in the Model 3 development process.

Tesla did not immediately respond to a request for comment.

The deposition was part of a lawsuit filed by Tesla shareholders alleging that the members of Tesla's board of directors, which included Musk at the time, acted in their own best interests, rather than in those of Tesla's investors, when they approved the $2.6 billion SolarCity deal in 2016. Since the acquisition, Tesla's solar business has, for the most part, declined, while critics have argued that the deal was a bailout by Musk of his cousins, Lyndon and Peter Rive, who founded SolarCity.

Musk said in the June deposition that SolarCity needed to either raise money or be acquired in the months before the Tesla deal, but said he believes SolarCity could have raised money from public markets if Tesla hadn't acquired it.

Musk said this month that the decline in Tesla's solar sales was temporary, and that he expects the company's energy business to eventually grow faster than its automotive business.

Read the relevant portions of the deposition document here.

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