Tesla Motors has announced a deal to buy SolarCity for less than the price it had originally proposed, as Chairman Elon Musk begins his plan to combine his electric car and solar energy companies.
Musk’s grand plan would mean the company could offer consumers a single source of hardware to power a low-carbon lifestyle, through solar panels and home battery storage systems.
“This is really all part of solving the sustainable energy problem”, Musk said in a conference call with analysts on Monday, according to The New York Times. “That’s why we’re all doing this – to try to accelerate the advent of a sustainable energy world.”
Acquiring SolarCity offers Tesla promise of profit growth within the electric energy sector
The merger values SolarCity at $2.6bn. Tesla originally made the offer in June, but did not go ahead immediately as SolarCity was in the process of forming a special committee to review the offer.
SolarCity’s shares, which had risen about 26 percent since Tesla made the offer in June, were down 3.75 percent at $25.70 before the deal was reached. Tesla shares were up 0.521 percent at $235.99, and in June, Tesla offered 0.122 to 0.131 of its shares for each SolarCity share, according to CNBC.
Tesla, which will report its second quarter earnings tomorrow, is experiencing a positive transition as a car company – expanding in California and filling more than 300,000 pre-orders for its Model 3 sedan coming out next year. Musk’s push for solar energy could potentially heighten demand even more, proving the merger a progressive move.
For Tesla, acquiring SolarCity offers the promise of profit growth within the electric energy sector, and offers a glimpse into Musk’s clean energy aspirations. However, evidence suggests the adoption of solar energy could take years, maybe even decades, according to analysts; a timeframe investors may not be prepared to wait out.