Tesla has officially acquired SolarCity, the largest American provider of solar energy services. The deal, which was sealed this morning, was approved by over 85% of Tesla shareholders, and marks another significant step in the company’s evolution, from carmaker to renewable energy firm.
Tesla CEO Elon Musk, who made headlines last month by announcing the company’s new solar roof tiles, recused himself from the acquisition vote. Musk owns around 20% of both firms and is SolarCity chairman. The deal, which totals around $2 billion, includes the absorption by Tesla of around $3bn of SolarCity debt.
Musk is confident that SolarCity will contribute over $1bn revenue by next year. But financial markets are unsure: Tesla has already burned $2.2bn in the past year, as it readied the unveiling of its Model 3 car, and built its Gigafactory, a $5bn facility in Nevada that will produce hyper-efficient batteries.
SolarCity lost $758.7m in the first half of this year. And many analysts believe South African-born, Canadian-American entrepreneur Musk may have bitten off more than he can chew. The 45-year-old is already CEO and CTO of SpaceX, which plans to visit Mars. His pneumatic, high-speed transport solution Hyperloop has been mooted for development between the Emirati cities of Abu Dhabi and Dubai.
“This is going to be a tough one for the sell side,” investor Theodore O’Neill told CNBC today. Others, however, have been thrilled by SolarCity’s innovative roof tiles, which Musk claims will likely cost less than regular tiles.
“The basic proposition would be, ‘Would you like a roof that looks better than a normal roof, lasts twice as long, costs less, and by the way generates electricity?'” Musk told attendees in Los Angeles last month. “It’s like, why would you get anything else?”