By Dave Michaels and Rebecca Elliott

WILMINGTON, Del. -- Tesla Inc. Chief Executive Elon Musk returned to court Tuesday for a second day to defend the company's purchase of SolarCity Corp.

Mr. Musk faced another day of cross examination after a heated first day during which he took aim at opposing counsel, while also arguing he didn't act improperly during the negotiating process.

The case dates to 2016, when Mr. Musk was chairman of both companies, and Tesla, then still unprofitable, bought money-losing SolarCity for about $2.1 billion to establish a single clean-energy business. Plaintiffs, which include pension funds that owned Tesla stock, have characterized the deal as a scheme to benefit himself and bail out a home-solar company on the verge of insolvency.

Mr. Musk, the opening and only witness in the first day in a nonjury trial in the Delaware Chancery Court, faced roughly five hours of testimony, saying the SolarCity purchase was crucial to the sustainable-energy strategy he had envisioned for Tesla for a decade.

"I don't think SolarCity was financially troubled," Mr. Musk said Monday. "In order to have a compelling product, you really needed to have a tightly integrated solar and battery solution. And we could not create a well integrated product if SolarCity was a separate company."

Mr. Musk spoke in a calm and sometimes quiet tone as he answered questions from his lawyers. Though he occasionally flashed his combative side when fielding questions from Randall Baron, a lawyer for the plaintiffs, whom he had already berated in deposition in 2019, where he called him "reprehensible" for "attacking sustainable energy."

To explain that behavior, Mr. Musk told the court he didn't respect Mr. Baron because the lawyer had once worked at a law firm whose partners became engulfed in an ethics scandal and went to prison over their misdeeds. "I think you are a bad human being," Mr. Musk said to Mr. Baron.

Though the grilling focused largely on what information Tesla shareholders were given about the financial condition of SolarCity, Mr. Musk at times veered farther afield in answering, particularly when it came to whether he exerted too much control over the purchase, a key question in the trial.

On Monday he said that he didn't enjoy being the boss of Tesla. "I rather hate it, and I would much prefer to spend my time on design and engineering, which is what intrinsically I like doing," he said.

He also took aim at rival companies with dual shareholder classes that can give some stockholders more power. He criticized Ford Motor Co., where the dual-class stock structure affords the family greater control, and Facebook Inc., where founder and CEO Mark Zuckerberg has extra voting powers, among others. Mr. Musk's Tesla shares come with no extra voting rights. Ford declined to comment, and Facebook didn't respond to a request for comment about Mr. Musk's remarks.

A primary question in the case is whether Mr. Musk, who owned roughly 22% of Tesla at the time, controlled the transaction. Proving the claim is a challenge because Mr. Musk was a minority shareholder of Tesla, and the company's shareholders approved the acquisition. Lawyers for Mr. Musk have said that SolarCity was worth more than Tesla paid for it and the electric-vehicle maker's board members, who included Mr. Musk's brother, Kimbal Musk, acted independently.

Other issues before the judge include whether Tesla board members, some of whom also were SolarCity shareholders personally or through investment funds they managed, were conflicted and whether vital information about the deal was withheld from shareholders. Mr. Musk testified that an independent director handled the negotiation and that Tesla's directors even overruled his proposal that Tesla provide temporary financing to SolarCity before the deal went through.

Opposing counsel Mr. Baron on Monday asked Mr. Musk why SolarCity's performance varied significantly from the projections that Tesla gave to shareholders in 2016. Mr. Musk blamed the decline in solar-panel installation and market share to Tesla's pressing need to focus on developing its Model 3 car in 2017 and 2018. Tesla at the time was struggling to bring the car to market.

More recently, Mr. Musk said, the health conditions hurt Tesla's ability to get permits for residential solar installations.

If Mr. Musk loses, he could be asked to make Tesla whole. That payment could equal the value of the SolarCity transaction if the presiding judge finds that the solar firm wasn't worth anything when Tesla agreed to buy it.

Other Tesla board members at the time of the tie-up agreed to settle last year for a combined $60 million, paid by insurance. The board members, some of whom had interests in both Tesla and SolarCity, denied wrongdoing.

Mr. Musk brought the proposed deal to Tesla's board in early 2016, court records show. The plaintiffs describe SolarCity as having been in severe financial distress leading up to the deal, at risk of tripping a debt covenant and without other fundraising options. Shareholders weren't fully informed of the company's condition, they say.

Mr. Baron pressed that point Monday, asking Mr. Musk about internal emails and meetings that discussed efforts to save money by delaying payments to vendors and other moves. The attorney also asked whether he was aware that Lazard Ltd. bankers had tried to raise money for SolarCity in 2016 and found most of the private investors they surveyed to be unreceptive.

Mr. Musk said Tesla also occasionally took such steps to conserve cash. He said SolarCity could have raised money from private investors if it had more time to do so, and ultimately could have sold stock to public investors.

If chancery court Vice Chancellor Joseph Slights III, the presiding judge, finds Mr. Musk didn't control the deal, the case is likely over for the plaintiffs, according to legal experts. Case law in Delaware generally defers to the business judgment of independent and properly motivated directors.