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."

Comments

Musk is an alien

[trybywrench]

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.

Re:Musk is an alien

[DarkOx]

Space X is doing some really cool work but it is also not meeting it's predicted launch rate.

True, but I think most outsiders 'priced' a bit of optimism into Space X's press releases. Overall they are enjoying a lot of success considering the complexity of what they are trying to do.

Tesla has some big problems with quality

Is that statistically true? I did some google searches and its hard to find good data. All the other big manufacturers are doing recalls with some frequency. Quality problems have always been a thing in the auto industry. Do you have proof Tesla is doing worse than average on per vehicle basis.

Tesla has some big problems with quality and the "beta" autopilot.

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.

Re:getting money out without effecting share price

[MachineShedFred]

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.

Re:getting money out without effecting share price

[yodleboy]

"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.

Re:Maybe Solar City won't be scammy and vague now?

[Jeremi]

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.