Tesla takes 'first steps' to form clean energy dynasty with bid to acquire SolarCity
Disruptive automotive manufacturers Tesla has submitted a bid to purchase sister company Solar City as part of a move to "complete the picture" and establish a holistic and "vertically integrated" clean energy empire.
Tesla Motors announced on Tuesday (21 July) that it had taken the “first step” in acquiring SolarCity by offering an all-stock deal worth nearly £2bn. Tesla’s chief executive Elon Musk is already the solar firm’s biggest shareholder, and striking a deal could be made easier by the fact that SolarCity’s chief executive Lyndon Rive is Musk’s cousin.
“The opportunity here is to have a highly innovative sustainable energy company that answers the whole energy question from power generation and storage to transport,” Musk told reporters after the announcement.
“We are a sustainable energy company; this is, broadly speaking, right in line with that. In order to solve the sustainable energy problem you need generation, storage, and electric cars.”
Tesla has already outlined what the potential acquisition would mean for owners of Tesla vehicles. Owning SolarCity is part of a move to “complete the picture” for the motor company by aligning with the Tesla Energy subsidiary, which already allows home owners to store energy through the Powerwall and Powerpack products – with reservations already amounting to $1bn.
SolarCity, which currently utilises Tesla battery packs as part of various solar projects, would provide Tesla with a “wide network of sales and distribution channels” that would allow the company to expand into market by offering “end-to-end clean energy products” to its customers. The acquisition would create a closed-loop, clean energy model that transfers renewable electricity between cars and home appliances via storage packs.
Revolutionise and revolt
With Tesla claiming that SolarCity is the “best” for solar panel installations, the purchase would also enable the company to interact with consumers on a greater scale, with customer satisfaction set to generate increased foot traffic to Tesla stores.
A successful purchase of SolarCity would certainly add fuel to fire of beliefs that Tesla is well-equipped to “revolutionise energy systems”. The company’s battery packs will be used to power the world's first hybrid-electric buildings and eventually reduce energy consumption across the Irvine Company’s entire portfolio by 25%.
With Tesla Model 3 pre-orders nearing the 500,000 mark as of May, the company has evolved from innovative disrupter to the mainstream face of sustainable business that is ready to “revolt” against the fossil fuel industry.