Tesla stores of the future will sell not only electric cars, but also battery packs and solar panels that can power your entire home. That's Elon Musk's vision, and he took a major step towards achieving it today by announcing that Tesla intends to acquire solar panel manufacturer SolarCity.
Tesla is offering a stock swap deal valued at $26.50 to $28.50 per share, or a premium of approximately 21% to 30% over the closing price of SolarCity's shares. The total value of the deal would be approximately $2.8 billion based on current closing prices. Musk is a member of SolarCity's board of directors and personally owns more than 22 million of its shares, according to Recode, which means he stands to gain approximately $600 million from the sale.
SolarCity, a Silicon Valley-based startup, is best known for installing residential solar panels, and generated quite a bit of interest in 2011 when Google invested $280 million in the company. Musk is interested in SolarCity because he wants alternative energy sources like solar to provide the primary charging capacity for his company's electric cars in the future.
"We think there's a huge opportunity here to have a highly integrated stable energy company," he told reporters on a conference call immediately following the announcement of Tesla's offer. "This is something that we've been thinking about and debated for many years."
SolarCity's operations would be completely integrated into Tesla. For consumers, that would mean a seamless electric car shopping experience. You could buy a Tesla and a home solar system to charge its batteries all in one place. Musk explained that "instead of having 3 trips to a house to put in a car charger," deliver the Tesla, and install solar panels, it could all be done at the same time.
That's dependent on whether the boards of both companies approve the sale. If they do, Musk said the integrated product offerings could appear as early as next year. There will be no change to any of the current products that SolarCity offers, nor would the acquisition affect sales of the Tesla Model 3, which is expected to be available next year.