First, the solar energy systems installer said it once again will install fewer solar energy systems this year than it had been predicting – another blow to investor confidence in SolarCity’s growth promises, even after the company greatly scaled back its expansion plans last fall. Users could also get the system hooked up to chargers for one of Tesla’s vehicles.
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“This is really all part of solving the sustainable energy problem”, Tesla CEO Elon Musk added during a conference call. The two firm have worked on several projects together, including the use of the former’s lithium-ion battery packs in some of the latter’s solar projects. This will save customers money by lowering hardware costs, reducing installation costs, improving manufacturing efficiency and reducing customer acquisition costs, Tesla says. Its previous outlook had been for 1,000 to 1,100 megawatts.
SolarCity, which is the US’s biggest supplier of solar energy, is 23pc owned by Mr Musk.
But in trading Monday, SolarCity shares fell more than 7% to $24.74 while Tesla dropped 1.3% to $231.70 amid concerns about the companies’ cash flow and the rationale for the deal.
In a joint statement both the companies stated that the “Solar and storage are at their best when they’re combined”. According to legislation, the solar panel maker has the possibility of seeking alternative proposals from other companies for 45 days, but we do not believe this will happen while Musk is the chairperson of the enterprise.
Mr Musk ultimately plans to develop a fleet of Tesla electric pickup trucks, lorries and buses, which will probably be unveiled next year.
“We also need to obtain regulatory approval and meet other closing conditions”.
Up to Friday’s close, SolarCity’s stock had risen about 26 per cent – valuing the company at $2.62 billion United States – since Tesla first made an offer on June 21. SolarCity products will be sold at Tesla’s 190 retail stores.
The terms of the deal, which will be an all-stock transaction, are based on calculated 5-day stock price averages.
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Well, this deal of merger is likely to cut down the losses that both the companies are facing individually.
