Tesla Motors looks to buy America's biggest solar energy provider, SolarCity

Some big Tesla Motors [NASDAQ: TSLA] news hit yesterday. According to Gizmodo*, Tesla CEO "Elon Musk is on the brink of acquiring the next critical component in a solar-electric transportation future. Tesla Motors just made a $2.8 billion stock-to-stock offer to buy SolarCity, one of the largest solar energy companies in the country... this move will allow the people who own Tesla vehicles to achieve the trifecta of energy independence, using SolarCity’s photovoltaic solutions to charge Tesla’s coming-soon Powerwall batteries. But it will also accelerate solar adoption by incorporating the panels into Tesla’s suite of products.

How did Musk explain the transaction? On a press call yesterday, Musk told reporters, "You can go into a store or go online and with a few clicks you can have everything from solar panels to batteries to electric cars." The other benefit Musk revealed is a planned technical integration with the Powerwall batteries—so homeowners will have the ability to control and monitor their charging needs using a single system. There will also be a program for large businesses as well. It's important to note SolarCity also happens to be a company founded by Musk’s cousins [see chart below] and one where he currently serves as chairman. 

Source: TechCrunch via Wall Street Journal

Musk told reporters that the deal was, "a no brainer. 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." CleanTechnica commented that, "This could easily turn Tesla into the equivalent of GM + Exxon, for the next generation. An incredible long-term play... Having a full ecosystem within one corporate roof that produces clean energy, stores clean energy, and puts clean energy into cars to propel them forward faster than your average Ferrari, Lamborghini, or Porsche is a natural fit for Elon’s aims and approach."

Tesla posted on their blog that this would make the company, "the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it... When brought together by the high foot traffic that is drawn to Tesla’s stores, everyone should benefit." Tesla also explained that its, "customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun."

In addition, Gizmodo* reported that Musk said that the timing [of this pending deal] is more about working on integrating the panels with Powerwall batteries before they hit the market. It’s also good timing as the also-coming-soon Model 3 is poised to make EVs more mainstream. Musk emphasized several times on the call that this was the right thing to do on a global scale. "It’s a thing that matters 10 times more than the product itself," he said. "The world doesn’t lack for automotive companies. The world lacks for sustainable energy companies."


*Source: Gizmodo