Elon Musk’s electric car and battery company Tesla has announced its bid to acquire solar energy firm, SolarCity.
Elon Musk's Tesla Offers $2.8b To Buy Solar Panel Maker SolarCity
After the proposed merger, customers will be able to outfit their homes with solar panels that will power the entire home including electric cars, seamlessly.
In the buyout, Tesla motors have offered to splash $2.8bn (£1.9bn). The move will see a union of sorts between the San Francisco Bay area businesses, which Musk termed as a no brainer. The deal, which awaits the board’s approval, will see Tesla move from being an electric car manufacturer to a diverse firm with the focus on end-to-end energy investments and technologies.
Speaking to reporters via phone, Musk said that consumers in this sector were not keen on finding a different car company, but they were interested in the services of a firm with sustainable energy solutions.
This comes even after Musk adduced that Tesla did not have a clear picture of its consumers who had bought Solar panels but he was sure that quite a chunk would gravitate towards solar energy. Users will be able to use Tesla rooftop panels, store energy in the company’s brand of batteries and then use the same in their electric cars.
The company predicts that the move will expand markets for both entities as they plan to rollout a $35,000 Model 3 vehicle sometime in 2017.
After the announcement, Tesla’s shares plummeted by 10% while SolarCity shares shot by a 23%. The CEO, who holds 19 and 22 percent of Tesla and SolarCity shares respectively, remained unsure about voting on the deal, and confirmed that market surveys would have to be done first before shareholders voted for the deal.
SolarCity has been battling a backdrop of quarterly losses despite being a leader in residential rooftop solar systems across U.S. markets. The poor performance has been attributed to a negative investor attitude for a market that is seen as competitive and complex.