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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."
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.