What is SolarCity?
What is Tesla Motors?
Why is Tesla buying SolarCity?
Is Wall Street against the merger?
Tesla announced in early August that it plans to buy solar energy firm SolarCity for $2.6 billion in an all-stock deal. The two companies want to scale their battery and solar energy operations. Tesla first offered to acquire SolarCity in June. The deal is not complete but should close in the fourth quarter of 2016. Reuters reported that Musk and Rive have recused themselves from voting on the outcome of the deal.
In a conference call with investors in June, Musk explained that when Tesla tries to sell someone the Powerwall it almost always has to answer questions about solar: “So then not being able to sell them solar directly at Tesla stores is quite inefficient. As you look ahead to [selling] the Model 3, a $35,000 car, well that same person at the same moment we could sell them roughly an equivalent value of solar panels and a Powerwall, effectively doubling the sale at that time, and then putting it all in at the same time,” he explained.
“This may seem counterintuitive to a lot of people, but I think it is so obvious that something should be done,” Musk added. “Blindingly obvious.” In other words, he sees Tesla buying SolarCity as common sense because the two companies’ customer bases overlap.
