Last week, Tesla shareholders “overwhelmingly” showed their support for a merger with SolarCity, the solar energy company started by Elon Musk‘s cousins. On November 21, a Tesla spokesperson confirmed the $2.6 billion acquisition is finished, which will enable Tesla to offer solar power to complement their electric cars and wall batteries.
Tesla first floated the idea of an acquisition back in June, saying should the acquisition go through they would be the “world’s only vertically integrated energy company offering end-to-end clean energy products to our customers.” Tesla started Tesla Energy in early 2015, offering products such as the Powerwall battery, and saw a SolarCity acquisition as a logical next step.
Related: Tesla shareholders “overwhelmingly” approve SolarCity merger
Some people are still concerned the merger doesn’t make a lot of financial sense for Tesla in the short term. CFRA Research analyst Efraim Levy told CNBC about the acquisition, “Whatever the synergies are down the road, it’s negative for current holders.” Some analysts say the SolarCity acquisition is too risky.
Tesla has recently unveiled products that make a lot of sense for a combined company, such as solar roof tiles and a glass solar roof for the Model 3. Tesla also indicated they think the merger will be beneficial for their company; in a statement in early November they said SolarCity would “add more than half a billion dollars in cash to Tesla’s balance sheet over the next three years.”
Other people point to Musk’s drive as one factor that pushed the deal through, even if it won’t benefit investors right away. Musk addressed the merger in his Master Plan, Part Deux, saying that the fact that Tesla and Solar City were two distinct companies “is largely an accident of history.” He said, “Now that Tesla is ready to scale Powerwall and SolarCity is ready to provide highly differentiated solar, the time has come to bring them together.”
Via The Verge
Images via SolarCity Facebook and Heisenberg Media on Flickr
