Inside Electric Vehicles - June 21st, 2016

Inside Electric Vehicles (Jun 21st, 2016)

We're only going to be sending breaking alerts on this list when the news is big, and this news is big. If it had broken just 10 minutes sooner, we'd have had the chance to get it in today's issue, but the news came out after we sent.

What do you think of getting occasional breaking news flashes like this?
Tesla Motors offered to acquire SolarCity for $2.8 billion in stock. Following the announcement, $TSLA shares plunged by more than 10% and $SCTY shares surged by almost 20%.

Elon Musk held a press call after the announcement, and a reddit thread offered this summary of Musk's points:
  • The goal is to integrate the products for a better experience for the customers - SolarCity and Tesla
  • Elon calls the deal a "no-brainer"
  • Tesla will have to issue new shares to make the deal happen.
  • The estimated value of the deal is 2.5 to 3 billion dollars
  • The acquisition will not impact the rollout of the Model 3, says Elon Musk
  • Tesla and SolarCity could offer new EV charging options by next year
  • Elon talks about SolarCity being integrated in Tesla - "no big walls internally will facilitate integration"
  • Elon describes a customer experience of buying an EV, a home battery pack and a solar installation seamlessly at the same location.
Image source: TechCrunch

Here's the full announcement from Tesla:

Tesla’s mission has always been tied to sustainability. We seek to accelerate the world’s transition to sustainable transportation by offering increasingly affordable electric vehicles. And in March 2015, we launched Tesla Energy, which through the Powerwall and Powerpack allow homeowners, business owners and utilities to benefit from renewable energy storage.

It’s now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun.

The SolarCity team has built its company into the clear solar industry leader in the residential, commercial and industrial markets, with significant scale and growing customer penetration. They have made it easy for customers to switch to clean energy while still providing the best customer experience. We’ve seen this all firsthand through our partnership with SolarCity on a variety of use cases, including those where SolarCity uses Tesla battery packs as part of its solar projects.

So, we’re excited to announce that Tesla today has made an offer to acquire SolarCity. A copy of Tesla’s offer is provided below.

If completed, we believe that a combination of Tesla and SolarCity would provide significant benefits to our shareholders, customers and employees:

  • We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered. With your Model S, Model X, or Model 3, your solar panel system, and your Powerwall all in place, you would be able to deploy and consume energy in the most efficient and sustainable way possible, lowering your costs and minimizing your dependence on fossil fuels and the grid.
  • We would be able to expand our addressable market further than either company could do separately. Because of the shared ideals of the companies and our customers, those who are interested in buying Tesla vehicles or Powerwalls are naturally interested in going solar, and the reverse is true as well. When brought together by the high foot traffic that is drawn to Tesla’s stores, everyone should benefit.
  • We would be able to maximize and build on the core competencies of each company. Tesla’s experience in design, engineering, and manufacturing should help continue to advance solar panel technology, including by making solar panels add to the look of your home. Similarly, SolarCity’s wide network of sales and distribution channels and expertise in offering customer-friendly financing products would significantly benefit Tesla and its customers.
  • We would be able to provide the best possible installation service for all of our clean energy products. SolarCity is the best at installing solar panel systems, and that expertise translates seamlessly to the installation of Powerwalls and charging systems for Tesla vehicles.
  • Culturally, this is a great fit. Both companies are driven by a mission of sustainability, innovation, and overcoming any challenges that stand in the way of progress.

Today’s offer to acquire SolarCity is only the first step toward a successful combination of Tesla and SolarCity. We will provide a further update if and when an agreement is reached.

This Tweet from two months ago may have been a hint:

WSJ's illustration of the overlap between SpaceX, Tesla, and SolarCity:

How likely are you to recommend Inside Tesla to a friend or colleague?

Copyright © 2016 Inside, All rights reserved.

You're receiving this email because you are subscribed to Inside Tesla. If you don't want to receive it anymore, go ahead and unsubscribe – or just hit reply and tell us how to make it better.

Subscribe to Inside Electric Vehicles