Elon Musk Wants To Sell You A Car And Solar Panels In Five Minutes
CNN/Stylemagazine.com Newswire | 6/22/2016, 8:29 a.m.
Tesla is making an offer to acquire SolarCity for nearly $3 billion in a bid to create an all-inclusive sustainable energy company.
Tesla chief Elon Musk told reporters that he envisions a Tesla store where a customer could fulfill all of their sustainable energy needs -- from power generation to storage and then transportation.
"Five minutes, you're done," said Musk, who owns 22% of SolarCity and is its chairman. "Completely seamless, painless. Easy and everything just works. That's what people want."
The news is the latest in a hectic year for Tesla, which finds itself in an unprecedented situation as it races to fulfill rabid demand for the Model 3, a $35,000 electric car that it has promised to deliver in 2017. Tesla has received nearly 400,000 preorders, which would immediately make the Model 3 one of the bestselling cars in the country.
Musk called the SolarCity acquisition a "no-brainer" and said it would not impact Model 3 plans or its Gigafactory, the giant factory it's building in Nevada to manufacture batteries.
Musk said an integrated product combining Tesla and SolarCity offerings would probably arrive in 2017, depending on when the acquisition is approved.
"It's the ultimate renewable energy dream," said Karl Brauer, a senior analyst at Kelley Blue Book. "It makes a lot of sense for them to be combined as a single company."
He noted that since the companies have already been working together on projects, they are familiar with each other's cultures and should mesh well.
Tesla is offering $26.50 to $28.50 per share, a premium of more than 20% to SolarCity's closing price Tuesday. In after-hours trading, SolarCity's stock jumped 17% and Tesla's dropped 11%. Shareholders from both companies will have to approve the acquisition.
The move is also another unique financial move from Musk. A recent Wall Street Journal report chronicled Musk's unusual tactics, including when his rocket company SpaceX purchased $214 million in "solar bonds" from SolarCity.
Musk said the acquisition of SolarCity had been thought about and debated for many years. Musk's cousin Lyndon Rive is the chief executive of SolarCity. Rive told reporters he was "very excited" about the possibility.
Brauer noted it was unusual for an acquisition to involve two companies without profitable histories.
"It's like the country that's been broke forever and never made any money trying to annex another country," Brauer said. "Shouldn't somebody be annexing you?"
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