On Thursday, Tesla Motors announced its shareholders had approved a motion to acquire SolarCity for approximately $2 billion. The company said investors “overwhelmingly” approved and supported the move, trusting it is in the best interests of both parties.
The Tesla-SolarCity merger follows a longstanding partnership between the two companies. The automaker and the solar energy startup collaborate in the development, retail, and installation of Tesla’s Powerwall home battery pack.
Elon Musk and Tesla openly expressed their intentions to buy out SolarCity back in August, and it has been implicitly part of Musk’s master plan to combine both ventures. The deal is expected to close in the next couple of days.
The CEOs of both companies are cousins
Besides being a co-founder and Chairman on SolarCity, Elon Musk is also the cousin of Lyndon and Peter Rive, the founders of the solar energy company. Lyndon serves as CEO while Peter acts as CTO.
The three men are cousins on their mother’s side. Maye Musk, a career model known worldwide. She is the twin sister of Kaye Musk, the mother of Lyndon and Peter Rive.
The family ties go even deeper since Elon was the one who suggested the idea of a solar energy company to his cousins, resulting in them founding SolarCity with his help.
Tesla’s acquisition of SolarCity will propel its energy business
Although the company has seen substantial growth over the last half decade, SolarCity remains largely a small firm. Based in California with some movement in the rest of the country, Tesla’s takeover will prove beneficial to both enterprises.
Tesla Motors has in its calendar the opening of its new Gigafactory, a complex dedicated to the development and production of its energy products, i.e. the batteries on Tesla cars, the Powerwall, and the Powerpack.
The merger with SolarCity will provide the California company with Tesla’s cash flow and infrastructure, making it easier for it to grow and consolidate as a powerhouse in solar energy.
Elon Musk may have to pay SolarCity’s debts out of pocket
There is a downside to Tesla’s acquisition of SolarCity, though, and that is that it is buying the whole company. As such, the buyout terms include the transfer of a billionaire debt in government subsidies and other financial ventures.
However, Musk told investors their faith in him and the merger “will be rewarded” in time. The CEO claimed SolarCity could add up to $1 billion in revenue to Tesla’s numbers by the end of next year.
As a last resort to calm down shareholders, Musk also claimed he would pay SolarCity’s debt out of his pocket if needed. The South African entrepreneur will stop at nothing to carry out his vision of an integrated clean energy company.
Tesla and SolarCity’s Solar Roof tiles will be cheaper than expected
Following the reveal that Tesla’s SolarCity acquisition had passed with 85% of support from stakeholders, Elon Musk turned to yet another expected announcement: the future of the Solar Roof.
Musk unveiled the Solar Roof concept as a joint project between SolarCity and Tesla just a couple of weeks ago, and now he is back with more details about the photovoltaic shingles.
The executive claimed the roof tiles with integrated solar cells would be so cost-effective, they will be cheaper to make and install than regular shingles. He further said power generation was just a “bonus” on top.
“So the basic proposition will be: would you like a roof that looks better than a normal roof, lasts twice as long, costs less, and – by the way – generates electricity? Why would you get anything else?” Musk said.
While the new product from the combined company is still pending for a price and release date, Tesla does have in the schedule the rollout of the entry-level Model 3 next year. Musk’s SpaceX also has some big plans for the future of wireless internet coming soon.