For his part, Musk called the deal a “no brainer” and offered the idea of a package deal in which customers could purchase an electric vehicle, home battery and solar power system at the same time. Musk is a major shareholder in both companies.
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“In light of Elon Musk’s SEC disclosure obligations in his individual capacity as a stockholder of SolarCity, this proposal will be publicly disclosed, but Tesla’s intention is to proceed only on a friendly basis”. Similarly, SolarCity’s wide network of sales and distribution channels and expertise in offering customer-friendly financing products would significantly benefit Tesla and its customers.
The Model 3 will hike capital spending this year by $750 million alone – to levels that some analysts say are unsustainable without fresh financing.
The hazy outlook, the latest in a string of warnings by SolarCity, singed the company’s shares, which are down more than 60 percent in the past six months.
He said that combining electric vehicles (Tesla Motors), energy storage (Tesla Energy) and solar power (SolarCity), is “the solution to the earth’s climate change problem”. Asked whether Tesla seeks to buy the company because it’s undervalued, Musk insisted the proposed purchase comes from “a desire to integrate products-that’s really the main reason for it”. The deal could be worth as much as .86 billion.
Shares in Tesla tanked more than 13 per cent to $189.99 in extended trading, wiping around $4.3bn off of its market value.
Musk’s vision of an end-to-end clean energy system, from the rooftop to the roadway as it were, will no doubt appeal to affluent consumers who can afford both sleek battery-powered cars and rooftop solar panels. “Both companies are driven by a mission of sustainability, innovation, and overcoming any challenges that stand in the way of progress”.
Investors weren’t buoyed by the prospect of Musk paying a significant premium for a company where he is chairman and largest shareholder.
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They want customers to buy EV, storage battery systems, and solar technology from one stop. The problem is he’s an even bigger investor in its Tesla Motors (TSLA), which is seeing it get shares crushed 10% on the news.The result is rather than being richer on the news, Musk is down $676.6 million.
