By on August 1, 2016

Tesla Model X

To bastardize an old Dodge slogan, if you’re willing to devote your life to sustainable driving and ditch your electricity provider, you could be Tesla material.

The electric automaker announced a deal with solar company SolarCity today — an all-stock agreement worth $2.6 billion. Acquiring the nation’s largest rooftop solar provider gives Tesla CEO Elon Musk the top-to-bottom green company he always wanted, but it opens the company up to new risks.

In a blog post on its website, Tesla stated, “As one company, Tesla (storage) and SolarCity (solar) can create fully integrated residential, commercial and grid-scale products that improve the way that energy is generated, stored and consumed.”

Yes, Tesla promises to give you that off-the-grid lifestyle you’ve secretly longed for, or at least a closer-to-being-off-the-grid existence. Model X SUVs are great for carrying around Powerwalls, by the way.

The deal values the solar company’s stock at $25.37 per share, and its shareholders will receive 0.11 Tesla shares for every SolarCity share. Independent members of each company’s board approved the deal, after certain members recused themselves from the decision. That obviously included Musk, who founded both companies, serves as SolarCity’s chairman, and owns 20 percent of each company’s shares.

The deal still needs shareholder approval, and SolarCity is allowed to solicit offers from other buyers until September 14.

When Tesla announced its plans to acquire the solar company, backlash was swift and harsh. Some accused the automaker of propping up a company to avoid financial ruin. Others claimed that taking on a new venture of this size could endanger Tesla’s car building efforts, especially as it ramps up production in advance of the Model 3.

Bloomberg notes that the deal rings in at $300 million less than initially planned, thanks to investor criticism. In an unfortunate display of timing, SolarCity downgraded its installation forecast by one-tenth today, adding more fuel to the rumors. The company expanded rapidly during the past several years, but its growth is now on the wane.

In its blog post, the automaker said the deal would help both companies realize savings:

We expect to achieve cost synergies of $150 million in the first full year after closing. We also expect to save customers money by lowering hardware costs, reducing installation costs, improving our manufacturing efficiency and reducing our customer acquisition costs. We will also be able to leverage Tesla’s 190-store retail network and international presence to extend our combined reach.

Tesla expects the deal to be completed in the fourth quarter of this year.

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76 Comments on “Tesla Buys Solarcity for $2.6 Billion, Wants to Sell You a Whole New Lifestyle...”


  • avatar
    SCE to AUX

    “Cost synergies of $150 million” = ~1000 layoffs out of 13000 employees.

    All the other efficiency improvements look like they will come from utilizing the current and future Tesla customer base to increase volumes. I doubt that will work with Model 3 customers, who probably aren’t eager to drop another $30k into installing a solar roof on their existing home.

    • 0 avatar
      Big Al from Oz

      SCE to AUX,
      I don’t know if your comment in relation to the “1 000” jobs is neutral or a negative statement.

      I’m no Tesla supporter, but if money can be made by laying off people and still achieving goals, then that’s good. That’s progress, this leaves 1 000 people for other jobs to again improve the economy.

      If people ran their households the way they expect others to run businesses we’d all be broke …… geez, most are.

    • 0 avatar
      Quentin

      I’d be far more likely to drop $30k on a solar panel system than I would a Model 3. My payback calculations show ~10 years for a solar panel system (with a 25 year life expectancy — my state also has generous tax incentives on solar panels).

      • 0 avatar
        mcs

        I have access to the database of Massachusetts residential solar installations and most of them don’t exceed maybe $23k. Solar Cities new plant in Buffalo should be able to drop that price.

      • 0 avatar
        DenverMike

        With a 10 to 20 year “payback” window, I’ll have to wait. Although DIY installs do seem worth it, even when your state denies incentives for the self-installer.

        Except we don’t really know how well the panels/converters will hold up, 10 to 15 years in. We know the panels start to form a yellow film or crust after 2 years, like car headlights.

        When spending around $25K, I get the feeling they’ll have to be replaced long before they pay for themselves, even if the panels/converters aren’t too obsolete.

  • avatar
    EBFlex

    So a company that can’t turn a profit and produces low quality and dangerous fashion accessories, just spent over $2.5 billion on something it doesn’t need.

    What a house of cards.

    • 0 avatar
      SCE to AUX

      Nice succinct troll.

      • 0 avatar

        But he’s right. One unprofitable company buys another unprofitable company.

        Tesla’s last EBITDA was -334 million.

        SolarCity’s last EBITDA was -481 million.

        Tesla doesn’t need this loser of a company when they’re hugely unprofitable all by themselves.

        • 0 avatar
          VoGo

          WhiskeyRiver,
          On the off chance you feel bound by using actual facts, TSLA’s last quarterly report showed EBITDA at -25M. They are narrowing their losses rapidly, and may break into profit in Q2.

          We’ll know more Wednesday when they announce results.

          • 0 avatar

            Those are the numbers at year end 2015.

            Quarterly numbers don’t interest me as I don’t invest in the stock. If I did, I’d be watching for a good quarterly number and a spike to bail out on.

          • 0 avatar
            VoGo

            “Those are the numbers at year end 2015”.

            Then they aren’t the latest.

          • 0 avatar

            The year isn’t over. I don’t care nor should you what their quarterlies are. Not unless you’re looking to sell stock. The more important numbers are the yearly numbers. For all we know they’ll write off an giant noncollectable debt in Q4. Who cares what they say about Q3???

        • 0 avatar
          SCE to AUX

          I won’t debate Tesla’s negative profitability.

          Specifically, I was referring to the “… low quality and dangerous fashion accessories” baiting type of comment, which hooks me every time.

          Whether Tesla ‘needs’ SolarCity is questionable. I can see the business synergy, if there was a willing market. But I’m not so sure there is a willing market.

  • avatar
    healthy skeptic

    He can’t sell me a new lifestyle, ’cause I live in an urban multi-family condo building. I’m just hoping the wiring up of my garage space works out, between the expense and the HOA. Otherwise, no Model 3 for me.

    • 0 avatar
      orenwolf

      I’m in the same boat. However I was lucky that the building sees wiring up the parking lot with a few BEV-read spots is a selling point, so I’ll be able to charge my model3 in my underground parking (hopefully) without issue. Didn’t cost me a cent either, which is pretty awesome. :)

  • avatar
    stingray65

    The synergies between these two companies is amazing. Both have never earned a profit. Both are totally dependent on government subsidies to survive. Both are vastly overvalued by the stock markets. A match truly made in heaven.

    • 0 avatar
      VoGo

      You may have confused this article with another about GM and FCA.

    • 0 avatar
      SCE to AUX

      “Both are totally dependent on government subsidies to survive”

      Repeating that doesn’t make it true.

      • 0 avatar

        Musk defends receiving $4.9 billion in government support for Tesla, SolarCity and SpaceX:

        https://www.rt.com/usa/264065-musk-tesla-government-subsidies/

        And here:

        http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html

        Solarcity received 11 million in stimulus funds and 411 million dollars in tax breaks (read that as a handout) as can be discovered in their 9/30/2013 10-Q filing available here:

        http://quote.morningstar.com/stock-filing/Quarterly-Report/2013/9/30/t.aspx?t=XNAS:SCTY&ft=10-Q&d=91ea1bcddf31efc04556da7970ad5084

        • 0 avatar
          VoGo

          1. The money for SpaceX is the government buying services. Not a subsidy. Not a handout. A purchase. The federal government is actually SAVING money by privatizing the work to private American entrepreneurial companies. I am surprised you are so opposed to this.

          2. Most of the other subsidies mentioned in the articles are from local governments in the form of tax reductions for locating factories in their states. This is normal business, which every major company that locates jobs in the US takes part in. Calling it a special subsidy is ridiculous.

          3. You continually rag on TSLA for being subsidized, but refuse to recognize that TSLA receives nothing from the government that isn’t available to every other American automaker.

          At some point, you’ll have to wrap your head around the concept that smart Americans “get” climate change and take action to remediate it. It’s just smart business.

          • 0 avatar

            I made a good point. The fact that you don’t like it doesn’t mean I gotta wrap my head around anything.

            For the record, I’m not a fan of tax breaks and subsidies for anybody. Sink or swim. If they sink, another company can jump in the market and maybe make things work.

            I don’t see where subsidization or tax incentives have done any real good. They are likely responsible for suppressing legitimate competitors.

          • 0 avatar
            VoGo

            WhiskeyRiver,
            You keep claiming that you are opposed to all government subsidies. And yet, it is only in reference to TSLA that you complain so vehemently.

            Just following your logic, you should comment on every review of a Chevy how awful it is that George Bush initiated the GM bailout.

            In response to every article about a Ford, you should sing to the highest mountains about how horrible the low interest loans to Ford were for our democracy.

            And you should respond to every ridiculous Hellcat reference with an abhorrence for the US government TWICE bailing out what is now a foreign manufacturer.

            But you never do that, do you?

          • 0 avatar

            Look. I rarely see an article here about Ford or Chevrolet that I care much about. I think the last two I commented on were the Buick Avira and the F150 cupholders.

            Nobody was discussing their financials.

            I think my track record on the subject of subsidies and tax incentives is pretty clear.

            I didn’t start this discussion, someone else did.

            You sir are about to offend me. And that’s not allowed around here.

          • 0 avatar
            VoGo

            As I have repeatedly stated, I’ll be happy to see subsidies for alternative fuels eliminated, but only after all the Big Oil and ICE subsidies are off the books.

            And I have no interest in apologizing for stating fact or holding up a mirror. We have a subsegment of this country made up of people whose hobby is to acted offended. I’ll leave you to seek your own succor.

          • 0 avatar
            TrailerTrash

            Wait…I want in on this.
            To easy.

            “The money for SpaceX is the government buying services. Not a subsidy. Not a handout. A purchase. The federal government is actually SAVING money by privatizing the work to private American entrepreneurial companies.”

            This is another example of the government causing an problem, then insisting they raise taxes or throw money at it to fix the very problem they caused.

            The point is, VoGo, they should stay out of the business to begin with. They should NOT paying somebody to do it. Just because they are paying for something they should never be doing in the first place isn’t saving me squat.

            And, just to make myself perfectly clear…I hated the gov bailouts.
            Both for the financial institutions AND the automakers.
            I know, I know…it saved our economy.

            Perhaps…the only help from the government should be IF our country’s security was at stake. Wars and perhaps things we must have or we do not make it…this is an investment I am for.
            But consumer manipulation or future economics based upon what government thinks the correct…um, no.

            But I guess we will never know, right? And since we never will…everybody who claims such should shut up.

            A last point I think we can agree on…that government should farm out many of its responsibilities. But it will never do what really makes it less of a monster bureaucracy…it will never release its powerful union backed employees to the free market economy. TSA…no way in hell will they ever go private.

          • 0 avatar
            VoGo

            TT,
            If you believe the US government should not be in the business of space exploration, that’s a reasonable position. I may not agree, but I respect it.

            But if the US government *is* in that business, then I’d like to see them accomplish it in the most effective, efficient manner. If that means privatizing to an American firm, I am fine with that.

            And if the government does decide to reward a contract to the best bidder, and does so honestly, then I have no reason to blame that private company for receiving those revenues.

          • 0 avatar
            TrailerTrash

            VoGo

            I am a lover of outsourcing.
            But this is not outsourcing…it is hand picking a a lifestyle.
            And I am not particularly talking about the space program, as you are.

            The government is ONLY outsourcing what it wants to win. It is handpicking companies and science it wants to win and outsource and giving cash to. Other programs it wants to keep and grow as patronage..it will not outsource.

            Hell…outsource the entire NASA program if you really want efficiency.

            It will never outsource TSA. It will never outsource Healthcare….and if you ever spent a single hour turned into a week conversation with Healthcare.gov, you would know the utter nightmare of incompetence I am talking about.

          • 0 avatar
            VoGo

            TT, You’ve got me all kinds of confused this evening. I thought you were posting about SpaceX. It looks like you are writing about the government picking lifestyles for people, and I don’t know anything about that.

          • 0 avatar
            TrailerTrash

            VoGo.
            At least I am not alone in being confused….
            It’s not easy living in my head.

            Ya, I should have better define all the stuff I was covering, but I thought I had gone waaaay overboard in words already.

            Um, I was sort talking about the govs insertion of funds into both of these companies and wanting to use the funding as consumer manipulation.
            That’s all, really.

            And I was agreeing with you on outsourcing….but not the choosing sides in business. How I wish the gov would outsource much of what it does.

            As far as the government picking and heavy handedly manipulating lifestyle…you gotta be kidding, right?

        • 0 avatar
          SCE to AUX

          “Government subsidies” = Buffalo, NY and the State of Nevada.

          Show me a large employer whose hand isn’t in the pockets of the local governments. If those citizens don’t want to play the ‘buy us some jobs’ game via their elected politicians, they don’t have to offer corporate welfare. Every other car company’s mfg plant is Exhibit A. I don’t condone it, but this really is a case of ‘all the kids are doing it’.

          SpaceX is a different entity, AFAIC. It caters to both commercial and Federal clients, so of course any NASA contracts with it are ‘shouldered by the taxpayers’.

          I carry no water for SolarCity, but the US Government routinely hands out grant money for such endeavors. Personally, I think solar power is a losing proposition.

          As for the ridiculous carbon credit system, the articles you cite throw numbers around with little context. The carbon credits aren’t paid for by taxpayers; they come from other mfrs.

        • 0 avatar
          tresmonos

          It appears Whiskey’s political opinion is showing again. Tsk tsk. Fight the power whiskey. Smash those keys while regurgitating Google search results for your desired spin.

          • 0 avatar

            Why don’t you just do me like you did Superdessucke back on May 11 tresmonos?

            ““You’re a f*cking idiot” and “Maybe we do need Bernie so he can send your dumb @ss back to school” were your contributions concerning someone you disagreed with on that day.

            Look it up. Article titled:

            Automotive Jobs Return to a Historic Ohio Site; Thank Jeep for It

            And before someone gets it wrong, you only apologized to Superdessucke after I called you out on it. Follow the post times and it will all be clear.

            I’m not trying to stir up trouble but I’m not going to stand aside and watch a hypocrite spin my comments.

            And I didn’t bring up politics at all. You did.

          • 0 avatar
            Pch101

            Quite a whine and cheese party going on here.

          • 0 avatar
            tresmonos

            Whiskey,
            It’s easy to troll you. I admit I made one post in bad taste that didn’t add anything of value. You on the their hand, make posts every single day that add no value and sometimes offend. This is going to be fun; just you and me. You’re like a much less intelligent more Spam-my version of me.

          • 0 avatar

            This seems to be just the kind of thing the “new” rules are supposed to suppress.

            You don’t get to troll me and you don’t get to throw politics in the mix.

            Thanks for the intimidation threat though. I’ll be alert.

            Wait… Isn’t that kind of intimidation post against the new rules?

          • 0 avatar
            Pch101

            DeadWeight was given a time-out because he attacked a writer and wouldn’t stop.

            BTSR was shown the door because he was trying to make Mark Stevenson his bitch.

            Robert Farago, a Republican and founder of TTAC, would have never put up with that. One of his cardinal rules was to stop personal attacks against the writers.

            Farago’s reason for that was simple: There are certain members of the audience who will try to destroy your website. The website is ultimately a business, and trying to deal with such people is a waste of time and resources.

            So stop your whining. The issue was not with their politics, but with their efforts to dominate the website. I didn’t even read BTSR’s comments, but even I could tell that he was trying to own this place. Unless he wants to buy it from Vertical Scope, he doesn’t get to do that.

          • 0 avatar
            tresmonos

            Pch101,

            I have a long history of indirectly hurting WhiskeyRiver’s tiny little feelings with my vulgar vocabulary and bipolar rants.

            He has some sort of vendetta and a lot of God damned free time on his hands. That’s what his shenanigans are about.

          • 0 avatar

            And now we take God’s name in vain.

            Nice.

          • 0 avatar
            VoGo

            Cry me a whiskey river!

          • 0 avatar
            Kenmore

            I’m enamored of neither whiskey nor God but at least as far as I’ve seen WR is unfailingly civil. Even when it isn’t deserved or reciprocated, by people including me.

          • 0 avatar
            Pch101

            He’s a whiner.

          • 0 avatar
            Kenmore

            There are plenty worse things.

          • 0 avatar
            Big Al From 'Murica

            You’re drunk WhiskeyRiver…Go Home.

          • 0 avatar

            You guys are something else.

            I don’t know what it is that the new rules are supposed to accomplish. I suppose it’s supposed to make the place better but so far looks like a complete failure and an excuse to run off good posters while protecting others.

            These personal attacks are apparently sanctioned. Bullying. Vulgarity. God’s name taken in vain. Patriotic Americans made fun of. Differing opinions called “whining.” God help any of us that don’t believe in global warming and don’t think electric cars or autopilots are ready for prime time. The vitriol on display here does nothing to improve discourse whatsoever.

            Civility seems to me to be a necessary element of a successful community. Job one of the TTAC staff should be to foster civility. Encourage it. Cultivate it. Nurture it. There’s nothing wrong with lively disagreement as long as it’s civil. But this sort of discourse is not civil. It’s mean spirited and ugly. And one poster in particular seems proud of his self admitted “vulgar vocabulary and bipolar rants.”

            Mr. Bipolar Rant says “You’re like a much less intelligent more Spam-my version of me.”

            No sir, I am not. Not anything like you nor would I ever want to be.

            Look. I come here because it’s fun. I can get almost all of this “news” somewhere else. I followed Jack Baruth in here so if you want to blame someone for my existence here you can blame Jack. Yeah, I sometimes post just because something amuses me.

            Without levity, this place would be totally avoidable for a lot of folks, not just me.

            So I’ve now had my say about it and I won’t be surprised if I get banned over it.

            And thank you Kenmore for the compliment. I am always civil. It’s nice that someone noticed.

          • 0 avatar

            Everyone: You all need to settle down and quit it with the petty, personal clap-trap. Final warning.

  • avatar
    Pch101

    “We will also be able to leverage Tesla’s 190-store retail network and international presence to extend our combined reach.”

    Even if that’s true, it would have been better for Tesla to have negotiated a commission package so that it got paid for selling solar panels without taking on the business risk.

    • 0 avatar
      VoGo

      Very true. This deal appears not to benefit Tesla shareholders. Except one.

    • 0 avatar
      Luke42

      That’s the same question I have, and Musk hasn’t answered it to my satisfaction.

      You can do cross promotion without buying the other company. You can share office space without buying the other company. It’s not rocket science, but it does require diplomacy, common goals, and playing well with others.

      Musk’s stated justification for buying Solar City (cross promotion, unified branding) raises the question, and doesn’t answer it in any way that I’ve discovered yet.

      • 0 avatar
        Pch101

        I suspect that Musk realizes that automotive is a loser, so he wants to turn Tesla into a green energy company.

        Transitioning the company into something bigger is a good idea. But I have my doubts that this is the way to do it.

        • 0 avatar
          orenwolf

          “I suspect that Musk realizes that automotive is a loser, so he wants to turn Tesla into a green energy company.”

          Tesla is the largest producer of BEV vehicles. Hardly a loser. But no, Musk from the very beginning indicated his goal was to remove reliance on non-renewable energy sources, not just make vehicles.

          • 0 avatar

            Bull. And. Shit. #LargestBEVcompany #myass http://www.businesswire.com/news/home/20151223005656/en/World%E2%80%99s-Largest-Electric-Vehicle-Maker-Presence

          • 0 avatar
            Pch101

            Tesla loses money. How many times do we need to go over this when the losses are clearly disclosed in the financial statements?

          • 0 avatar
            orenwolf

            I don’t know what half the commenters here are going to talk about if Tesla does turn a profit. My theory is they’ll find another reason to call the company “doomed”, though.

            Fact is, regardless, that Tesla’s stated purpose has always been fossil fuel independence. Solar city isn’t a pivot, as some are claiming, but a furtherance of that ideal. If anything we should be applauding Musk for staying on target and not being pressured into building a luxury car company in opposition to his original goal of sustainable energy and transportation for everyone.

          • 0 avatar
            VoGo

            SexCPotatoes,
            It depends how you count. If you are counting # of vehicles, then BYD is ahead. If you count revenues (which is what matters from a financials perspective) then Tesla is ahead because they charge a lot more per vehicle.

            PCH,
            No one disputes that Tesla has not been profitable. Their Q2 numbers will be released today – I am curious to see the results.

          • 0 avatar
            Pch101

            “No one disputes that Tesla has not been profitable.”

            Er, Orenwolf believes that Tesla makes money on cars. He says it often.

            You’ve been on the same threads, and you haven’t noticed his lengthy “explanations” of Tesla’s alleged profitability? He believes himself to be quite knowledgeable in the area of finance, even though it should be clear from his comments that he is anything but.

            His buddy Vulpine does the same thing. And if you read other comments online from the Tesla illiterati, then you will find plenty of folks who earnestly believe that Tesla is profitable.

          • 0 avatar
            VoGo

            There is a saying in professional sports that you are as good as your record. I would say the same applies to public companies and their income statements.

            That doesn’t mean that TSLA isn’t a great firm that has had success so far doing the nearly impossible. It just means they haven’t been profitable to date.

          • 0 avatar
            Pch101

            Tesla doesn’t make money because it can’t sell cars at prices that are high enough to generate a profit.

            That is probably not going to change. The reason that major automakers did not bother to do what Tesla is doing is because it can’t be profitable.

            Hence, the motivation to turn the company into something that isn’t completely dependent upon vehicle production. At some point, Tesla shareholders will awaken from their stupor and realize that a company has to have profits in order to sustain its stock price. Where are those profits going to come from if cars won’t produce them?

  • avatar
    NickS

    If “synergies” means cross selling to each respective customer base I am guessing they have a plan to grow a market where any EV/Tesla owner can be converted into a PV customer and vice versa. Is there a huge growth potential there that would make financial sense for the customers? I am skeptical of that. The PV/local generation market is experiencing some upheaval now with utility companies pushing back on the pricing advantages many solar customer had with net metering.

    Perhaps the grand vision is some form of combined solar and EV system that uses AI to utilize parked Teslas to power city blocks and/or use solar roofs to charge them up. This is not new — there are a couple of systems like that in northern Europe. The economics are not there, and if the plan is to pursue something like that to the nth degree it’s an indication of a personality disorder. Pursuing these types of innovations on a large scale requires serious cash in hand, usually by a large company that can use its profits in other sectors to bankroll a risky new venture.

    I thought both companies are on revolving credit.

    • 0 avatar
      VoGo

      I thought the synergy was to lease the solar panels + big battery for the house + Tesla car. You could make the argument that a bundled payment at say $1,000/month would be interesting if it took large bites out of my $200/month home energy bill and $100/month gasoline expense.

      • 0 avatar
        NickS

        No doubt, that kind of calculation might work for some customers. But $1K seems very low to make it feasible for a company to offer PV + EV + storage on the customer premises (telecoms charge a third of that for nowhere near that much infrastructure supplied to each customer site). That won’t put them in the black any time soon. They’d be bleeding cash until some future date when they are hopefully signing up customers by the millions.

        The one upside is trying to get into a subscription revenue model with a long horizon.

        Does $200 home energy bill mean both electric and gas? $1000 per month had better take out the enture electric bill. FWIW, we were going to go full steam with PV etc but we did some smart upgrades and reduced waste use so it now makes zero sense to have PVs. Obviously that’s not for everyone, especially if your household stays occupied during the day, etc.

      • 0 avatar
        Felix Hoenikker

        That makes no sense to most people unless the cost of the combined solar/EV electricity bull is less than $300/month in this case.
        The basic premise to make this financially viable is to finance the cost of the solar system with the savings over a pure grid system electric bill. In other words, to get me to assume the capital of some solar PV/electric vehicle fuel savings requires that there is a monthly electricty bill savings to finance the capital cost of the EV system.
        I an not aware of this happening without subsidies.

        • 0 avatar
          VoGo

          Felix,
          If you are curious, Bloomberg has done some great analysis on the declining costs of solar and wind energy. Worth the read, but if you want the headline, it’s this: The costs of generating wind and solar energy are declining quickly and are on track to be cheaper than fossil fuels in most locales within the next 5 years. Soon, no subsidies will be needed to encourage consumers to make the right choices.

          • 0 avatar
            NickS

            But take note that with or without subsidies, net metering rates are changing in some states to stop the imbalance between price paid at time of use and time of generation. This will directly affect the payback time for many, even with a reduction in the price of solar. In fact, some may never see a payback, especially any who added more panels to gain even more from the rate structure.

            Here in California this got delayed for a few years, but it’s coming. It won’t be the correct one either but the pendulum will stop swinging eventually.

  • avatar
    Speed3

    I bet Sergio is FURIOUS that Musk got his golden parachute and he didn’t.

  • avatar
    indi500fan

    To the extent that Muskie’s electric rollout is suppressing the price of fossil fuels (which I doubt is much) he has my gratitude.

  • avatar
    FAHRVERGNUGEN

    Makes perfect sense to me. This bundles both companies up for the one entity who controls most of the heavy metals required for building batteries.

    China Inc.

  • avatar
    Spike_in_Brisbane

    “We will also be able to leverage Tesla’s 190-store retail network and international presence to extend our combined reach.”
    Nobody has yet mentioned the international presence part of this statement. Here in Queensland my electricity costs 22.2 c/KWh and $1.16 per day supply charge. Solar panels on my carport to charge my Tesla or Leaf make some sense for me.

  • avatar
    Big Al From 'Murica

    Well the whole “sell you a lifestyle” bit has worked for Harley Davidson and the clientele of both are probably much closer than either would care to admit.

  • avatar
    Big Al From 'Murica

    The problem with pushing solar panels to the Tesla Clientele is that they are fairly likely to live in neighborhoods with HOA’s that prohibit the installation of them on the roof. I’m not endorsing that at all as I’d like to install them one day because Augusta, GA. The one benefit to this from my perspective is that maybe Tesla is a big enough entity to overpower the lobbiest at Georgia Power and have the non solar friendly states move that way.

  • avatar
    mchan1

    “We expect to achieve “cost synergies”….”

    Hate when companies use fancy words to sell itself which is a sign that it doesn’t know WTF it’s doing, considering that I’m in the financial/accounting world!

    One unprofitable business buying out a similar one?? Good grief.

    Only the EV lovers would rationalize this and love it.
    Better for people to just install solar panels onto their house’s roof than believe in EV batteries which has a shorter life span and limited use.

    Would’ve been better if the company did NOT receive ANY federal/state tax subsidies or buyer’s tax incentives which come from other taxpayers’ tax dollars!
    ^
    THAT is the reason why Tesla is most hated… using taxpayers’ dollars.
    The worst is when Tesla and EV lovers b$tch about others when they use Other Peoples’ money instead of their own!

    • 0 avatar
      VoGo

      I do M&A for a living, so I’ll share this perspective: “synergies” are a part of every deal. Cost synergies (i.e., reductions in cost from eliminating redundant activities) and Revenue synergies (selling more by leveraging each others products or sales force) are what drive M&A. So that part is 100% normal.

      Your observation that combining two money-losing companies is not a recipe for success is creditable and a perspective that TSLA will need to overcome.

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