LOS ANGELES _ Shareholders of Tesla Motors and SolarCity voted Thursday to approve the luxury electric car maker's acquisition of the rooftop solar giant in a $2.23 billion deal.
The two companies have said that SolarCity would contribute $1 billion or more in revenue to Tesla next year and more than $500 million in cash to Tesla's balance sheet over three years.
Institutional Shareholder Services, a firm that advises mutual funds and other institutional investors, has recommended the merger. But lawsuits have been filed challenging the transaction, and skeptics have called the all-stock deal an attempted bailout for both companies because each faces a cash-flow crunch.
At stake is the future of the leading rooftop solar company, which has increased its revenue this year yet continues to lose money. The acquisition will morph Tesla into a company that provides consumers with an entire electric ecosystem _ solar power, energy storage, smart technology for managing household appliances and electric transportation.
Elon Musk, chief executive of Tesla and chairman of SolarCity, and his cousin Lyndon Rive, chief executive of SolarCity, have proposed lofty plans to drive their business, including glass solar shingles on homes to make the solar panels more appealing. The acquisition by Tesla of SolarCity will create a one-stop shop for home energy needs.
But finding the sweet spot in the home energy market has proved to be a challenge, in particular for rooftop solar firms. Although the price of solar panels has fallen to lows that make it a cheap source of electricity, the labor costs in the rooftop solar business have hurt profitability.
To cut costs, SolarCity entered into partnerships with companies such as home-sharing firm Airbnb to find new customers. SolarCity is offering Airbnb hosts and renters a $1,000 rebate on solar panels as a way to recruit new customers without having to pay anyone to find people to buy solar power.
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