Elon Musk’s electric vehicle company, Tesla Motors, has bought Elon Musk’s solar power company, SolarCity, in an all-stock transaction worth $2.6bn (£2bn), the companies have confirmed.
The new firm sees Tesla emphasise its battery power storage technology as a natural fit to SolarCity’s solar generation. Musk called the merger a “no brainer”, saying: “Instead of making three trips to a house to put in a car charger and solar panels and battery pack, you can integrate that into a single visit. It’s an obvious thing to do.”
In their statement announcing the merger, the firms said: “Now is the right time to bring our two companies together: Tesla is getting ready to scale our Powerwall and Powerpack stationary storage products and SolarCity is getting ready to offer next-generation differentiated solar solutions. By joining forces, we can operate more efficiently and fully integrate our products, while providing customers with an aesthetically beautiful and simple one-stop solar and storage experience: one installation, one service contract, one phone app.”
The transaction, mooted in late June, had faced uncertain prospects as minority shareholders in both companies had questioned the necessity of merging the two companies. While Musk is the chief executive of Tesla Motors, his cousins Lyndon and Peter Rive are the chief executive and chief technology officer, respectively, of SolarCity, while Musk is chairman. Musk and Lyndon Rive founded SolarCity in 2004, the same year Musk joined Tesla Motors as chairman after investing in the company.
The resultant transaction will see Elon Musk paying Elon Musk a substantial amount of Tesla shares in exchange for his SolarCity shares. But the companies argue that they expect to save $150m in the first year alone, as well as being able to cut hardware and installation costs and use Tesla’s retail network to extend SolarCity’s reach internationally.
