Tesla Motors looks to acquire Solar City to form vertically integrated energy company

June 22, 2016

Elon Musk’s Tesla Motors today made an offer to acquire Solar City, another company that, according to the Los Angeles Times, was “funded and driven” by Musk.

In a blog post, Tesla writes, “Tesla’s mission has always been tied to sustainability. We seek to accelerate the world’s transition to sustainable transportation by offering increasingly affordable electric vehicles. And in March 2015, we launched Tesla Energy, which through the Powerwall and Powerpack allow homeowners, business owners and utilities to benefit from renewable energy storage.”

The blog continues, “It’s now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun.” Solar City provides that access.

Tesla says of the combined companies, “We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered. With your Model S, Model X, or Model 3, your solar panel system, and your Powerwall all in place, you would be able to deploy and consume energy in the most efficient and sustainable way possible, lowering your costs and minimizing your dependence on fossil fuels and the grid.”

The LA Times notes, “Musk is the top shareholder of both companies. He is chairman of SolarCity and owns 22% of the company; at Tesla, he is chairman and chief executive and owns 21% of that company.”

A Greentech Media Research analyst had this to say about the proposed deal: “A 21% to 30% premium on a depressed stock price, paid entirely in equity in another risky company. Don’t know that I’d take this as a SCTY shareholder.”

About the Author

Rick Nelson | Contributing Editor

Rick is currently Contributing Technical Editor. He was Executive Editor for EE in 2011-2018. Previously he served on several publications, including EDN and Vision Systems Design, and has received awards for signed editorials from the American Society of Business Publication Editors. He began as a design engineer at General Electric and Litton Industries and earned a BSEE degree from Penn State.

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