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Tesla Is Buying SolarCity for $2.6 Billion (thenextweb.com)
Tesla Motors announced Monday that it has reached a deal to buy SolarCity (San Mateo-based provider of energy services), the next step in Elon Musk's plan to combine his electric-car and solar-energy companies. It's already a family affair: Musk, Tesla's chief executive, owns about 21% of SolarCity and serves as chairman. His cousins Lyndon R. Rive and Peter J. Rive are SolarCity's chief executive and chief technology officer, respectively. The independent members of both companies' boards approved the $2.6-billion all-stock deal, Tesla said. Tesla said it expects to have cost synergies of $150 million in the first year after the deal closes. Tesla said it expects the deal to close in the fourth quarter, although the proposal must still be approved by a majority of the disinterested shareholders of Tesla and SolarCity and requires regulatory approval. It also contains a "go shop" provision that gives SolarCity 45 days to "solicit, discuss or negotiate alternative proposals from third parties."
a fluffy white cat to stroke and a subterranean volcano layer.
If a main player was to sell shares in the primary business it would reflect a lack of belief in the future of that business and negatively affect the share price. If however you happen to own a large slice of a lesser company and contrive a buyout the chances are that the share price of the primary business will be unaffected and it's asset book improved, and the value of the lesser company is defined by the purchase and the share price rises accordingly, founders and venture capital get to cash-out.
Tesla has a cult like investor following, Solar City no longer does, so making it all Tesla keeps the share price propped up.....for now.
SC hires marginally employable wankers to harass people at big box stores and farmer's markets. This hints to me that their product really doesn't give the value that they claim. Why the high pressure?
I did a contract job as a PC disconnect/reconnect tech for a moving company in 2011. We had to move Solar City to a new location on the weekend after their company Christmas party. I came across a small table in the middle of a bullpen where it looked like someone — or maybe the entire department — raped a Christmas tree to death. Saddest thing I've seen during the holidays.
They used the word "synergy". I'd flip the stock-sell switch on that alone.
Table-ized A.I.
What Musk is getting done in one lifetime is surreal. An old gf of mine thinks Musk is an alien and enlisting humans to help him build the technology he needs to get back home.
I came to the datacenter drunk with a fake ID, don't you want to be just like me?
Wait, you're saying Musk might be dabbling in an accounting/balance sheet/share price gambit and not unifying Tesla and Solar City for the benefit of humankind?
Ya got Tesla, folks, right here in SolarCity.
Tesla with a capital "T"
And that starts with "T" and that stands for trouble!
Or maybe Musk is a better entrepreneur than you are. Naaah - can't be! We all know you are way better at making electric cars and rockets.
Hmmm if I worked at SolarCity I'd probably be freshening up the old resume right about now.
Yeah, because there is absolutely no synergy between a company that produces electric cars, and a company that empowers people to produce their own electricity at home... where they keep their car.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
He's unifying them for the competitive advantages it will bring. He wants to speed the transition to renewable energy "for the benefit of humankind" as you put it. But he's still a capitalist, and wants to be the one making the most money while doing it.
Or maybe Musk is a better entrepreneur than you are. Naaah - can't be! We all know you are way better at making electric cars and rockets.
And what does that personal speculation of yours have to do with anything? If you'd like to offer a deeper explanation of your take of the transaction, I'm all ears.
It takes 3 or 4 phone calls, and some "do not disclose" paperwork in order to find out that you won't save any money, and you won't own anything.
Synergies don't require acquisitions to work. In fact, one could argue that Tesla has restricted their supplier options by this move. What does Solar City really bring to the table that they could just get as needed?
If you think it is all about synergies and not about shareholder value you are fooling yourself. Solar City has been struggling due to tight margins in that competitive industry, and the future doesn't look any better with reductions in subsidies and tax assistance going forward. Its a remarkably convenient time to be getting a premium price for such a company. I am sure that Solar City shareholders unanimously support the move, whilst some Tesla shareholders will have concerns.
he wants to be the one making the most money, huh?
you really need to read more of the history of his companies.
several times, SEVERAL, he has sunk HUNDREDS of millions of his OWN money in order to keep his company afloat.
so in all of the history of capitalism, i'm ready to hear your examples of the many "pigs" who have done such a thing in the midst of their greed.
otherwise, I'd suggest you reconsider the possibility that someone might think what they're doing is good for humanity.
"What does Solar City really bring to the table that they could just get as needed?"
The ability to provide an Apple like end to end ecosystem and the attendent lock-in. Solar hardware and storage optimized for your Tesla. Go ahead, laugh, but people will buy it, just like they buy Monster HDMI cables because the bits are cleaner.
Then again, maybe it's not bad. Imagine a person that would like to go solar and get an EV, but man that crap is expensive. What if Tesla/Solar City could give you a bundle deal? Maybe even amortize your Tesla payments out over the 20 years they estimate for a Solar City installation? Do an iPhone-like upgrade program, maybe every 5 years, you pay a fee and get a new car? Damn it, now I'm starting to get myself interested.
No, I won't laugh, that is a good answer. While these days its not that hard to source such integrated systems from different suppliers, it can make sense to integrate them. But Solar City doesn't really bring any of that key technology to the table, they just bring the power supply side of it. The only place that becomes integrated is at the inverter, for all practical purposes.
They do bring the installation service. But that could be contracted out as well, as likely Solar City would (or maybe even does already) subcontract much of it.
Don't forget the financing/leasing part of Solar City, that isn't easy to set-up quickly at a large scale.
Doesn't the Tesla Powerwall include the inverter components as well? So they can provide all the hardware, plus the installation (whether or not it's subcontracted out).
Which brings in another very important aspect they can streamline: financing. As any car dealership can attest, financing is a MAJOR profit center, and Tesla now stands positioned to not only finance your shiny new electric car, but also your home solar upgrade at the same time - hardware and installation as one big, shiny, easy to finalize bundle. Great profit for Tesla, and potentially a great deal for the customer as well. No overhead due to coordinating between organizations (other than the power company connect), and no finger-pointing runaround if something goes wrong.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
I have some ocean front property for sale in Colorado if you are interested. The best part, we take care of all the maintenance and fees.
"several times, SEVERAL, he has sunk HUNDREDS of millions of his OWN money"
Welcome to business, you must be new here. Businesses, especially large corporate ones, often need large cash infusions when they are getting up and running. This is especially the case when you're working with the high capital investment companies (automotive, transportation, space, solar, etc) that Musk often deals in. They only begin making decent profits a decade or so after their inception after the R&D/investment have established the business. Think about it kind of like the Railroads, you get steady revenue after a stretch of track is completed but building that track, purchasing the locomotives & cars initially makes you business look like an utter failure. Those investments however last a long time with minimal maintenance and eventually your revenues catch up. The solar business is a perfect example. The panels cost quite a bit up front but last decades with virtually no maintenance, treated reasonably they should eventually have a significant return on investment ($150 (100w panel) / $0.13 (grid Kwh) = 1,150 hours * 1.8 (inverse of capacity factor) / 8 hours per day = 259 days till break even on panels only).
http://grammarist.com/usage/af...
The amount of power required to charge a Tesla is vastly higher than most home solar arrays provide (even if you dedicate them to charging the car, which you can't since most people take their cars with them during the day and solar arrays don't produce at night.) Solar City was facing hard times due to the economics of solar and shifting the ownership to Tesla isn't going to change that, it will just shift the costs. (I installed an 11kw solar array at my home so i do realize what's involved regarding cost, installation,etc. )
I don't think it's included in the quoted price for a powerwall.
SolarCity gets something out of it too - cheaper access to the same PowerWall energy storage solutions they are already selling. Also, they can more deeply integrate smarter charging of a Tesla car, and use the car as energy storage during off-peak hours. And a retail presence where their target demographic is already walking in the door - eco conscious people with above average annual income.
This really is a smart move if you spend more than 10 seconds to think about it.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
SolarCity does their own installs, and they are the fastest install you can get in the US. And, they are leading the market in price per watt installed, which is only going to go down once they open their own manufacturing facility in New York next year, and are not beholden to the import tariffs on all the other panels coming from China.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
If you'd like to offer a deeper explanation of your take of the transaction, I'm all ears.
Tesla will soon be the world's largest lithium ion battery manufacturer, and with the size of batteries each Tesla will need... perhaps the largest customer if they meet sales goals. If solar city starts leasing a lot of residential solar panels with batteries built into the unit they'll probably be the 2nd largest customer for batteries after Tesla.
People think there are a lot of lithium ion batteries out in the world... and there are. But each Tesla 85KWh battery is equivalent to ~1,500 laptop batteries.
The two most battery intensive industries are energy storage and transportation. You have to start thinking of Tesla as a "Battery Company" not an "Automotive company". And as a "battery company" it makes perfect sense to buy up one of the largest "battery charger companies". Renewable energy doesn't work on its own. You need some form of storage to make renewable power work. We're not very heavily invested in solar power so the power companies are just taking it on the chin to supply regulated constant power. If Solar City wants to grow, they have to be able to eliminate the need for baseline generators (fossil fuel and nuclear) otherwise the legacy power generators will rightfully complain that they can't affordably maintain energy security.
You sound like a Solar City sales person, or employee. They may claim to be the fastest, but I doubt anybody really knows, as there are many installers out there.
Thanks for putting some effort into that response, unlike your previous one. Much better!
Of course until Tesla batteries actually are produced at low cost, and we don't know when that will be, they can both suffer together and together play the "we are growing so we cant make profits" card. Unless, as I've stated elsewhere, Musk can prop up initial battery production as a capital cost.
You sure are smug about stealing from people who rent.
Yeah, or I can use Google.
"The total installation time for a standard 3-kilowatt solar system of about 20 solar panels is usually somewhere between 1 and 3 days. Average labor time is 75 man-hours, which can be further broken down into electrician installation labor (49 man-hours) and non-electrician installation labor (26 man-hours)." - source
You can do the next one: go ahead and find the numerous references to SolarCity getting installs done in a few hours, or YouTube timelapse videos of the whole thing being done before lunchtime.
If the solar industry themselves are saying 1 to 3 days, and yet one company is able to get it done in less than half a work day, I'd say they are far above the average when it comes to install time. Do you think that massively reducing install labor by having better mounting hardware might have some effect on installed cost per watt?
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
Do you think that massively reducing install labor by having better mounting hardware might have some effect on installed cost per watt?
No, I think that would be negligible. Installation labor is pretty cheap per hour. They may make claims of 'massively reducing' install time, but there are plenty of clever installers out there that have optimized the process.
You might think it, but that doesn't make it true. Find some facts.