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Tesla Is Buying SolarCity for $2.6 Billion (thenextweb.com)

Posted by msmash on from the big-business-day dept.

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."

10 of 80 comments (clear)

  1. Musk is an alien by trybywrench · · Score: 4, Insightful

    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?
    1. Re:Musk is an alien by LWATCDR · · Score: 3, Insightful

      "Is that statistically true? I did some google searches and its hard to find good data."
      Consumer Reports no longer gives the Tesla S a recommended because of problems with reliability.

      "No the media has big problems with it, namely understanding and evaluating risk. Many of the known cases where auto pilot has caused problems have been in situations where it was not being used as directed. In terms of accidents per miles driven its a got a good record, with caveat that most people are using it in situations where humans typically do have a lower than average accident rate too."

      Yea that is really making excuses. The Ford Bronco II had no problem with roll overs if you drove it like a short wheelbase, high center of gravity truck and not like a car...

      --
      See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
  2. Re:getting money out without effecting share price by dave420 · · Score: 2, Insightful

    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.

  3. Re:getting money out without effecting share price by MachineShedFred · · Score: 4, Insightful

    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.
  4. Re:getting money out without effecting share price by Mr+D+from+63 · · Score: 2, Insightful

    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.

  5. Maybe Solar City won't be scammy and vague now? by netsavior · · Score: 3, Insightful

    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.

    1. Re:Maybe Solar City won't be scammy and vague now? by whoever57 · · Score: 2, Insightful

      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.

      Depending on the state in which you live, your roof orientation, shading, etc., a solar installation can pay off in as little as 5 years,

      But leasing or PPAs are a mug's game. As you state, with leases or PPAs, you don't own anything. Worse still, the solar panels may make it more difficult to sell or refinance your home. Also, some states have rescinded their net energy metering programs, which means that only the smallest solar installations have any chance of paying off.

      SolarCity, in particular, claims that they don't put a lien on your house, but, they do put a UCC-1 fixture filing against your house, which has the same effect as a lien.

      --
      The real "Libtards" are the Libertarians!
    2. Re:Maybe Solar City won't be scammy and vague now? by Jeremi · · Score: 5, Insightful

      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.

      Our condo building's HOA has been saving about $300/month for the last 5 years via a SolarCity PPA.

      It's true we don't (and won't) own anything, but for us that is a benefit -- that means that if something breaks, we're not on the hook to fix it. If the system ever goes down, it's SolarCity who loses money until it gets fixed, not us (since we pay per kWh generated, not per month). Since nobody on the HOA board is an electrician or technically minded, the zero-responsibility-for-maintenance aspect is important.

      The upshot is: $300/month savings on our power bill, with no risk to us, and no money out of the HOA's pocket, ever. The only thing we had to give up was some space on our roof, which wasn't being used for anything anyway.

      --


      I don't care if it's 90,000 hectares. That lake was not my doing.
  6. Re:getting money out without effecting share price by Mr+D+from+63 · · Score: 3, Insightful

    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.

  7. Re:getting money out without effecting share price by yodleboy · · Score: 4, Insightful

    "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.