Tesla Buys Solarcity for $2.6 Billion, Wants to Sell You a Whole New Lifestyle

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.