Tesla CEO and SolarCity Chairman Elon Musk has lobbied for the Tesla Motors Inc. and SolarCity Corp. $2 billion deal to push through. The automaker's shareholders recently voted to approve the said acquisition. Musk's vision of integrating solar roof with electric cars should go far. This pitch would have made a lot of sense.
Musk's Persistent Effort Paid Off
Musk was very persistent in making the acquisition possible. Now, his efforts have paid off since more than 85 percent of Tesla's shareholders have voted in favor of the deal. Likewise, SolarCity's shareholders have done the same.
When the possible merger was initially announced, it drew mixed receptions. Some analysts thought that Tesla would have nothing to gain from buying SolarCity. One of the reasons is the fact that the solar energy service provider has to pay its huge debt.
Despite this, the merger received an endorsement from the influential Institutional Shareholder Services firm. It eventually helped this deal to push through.
The Effect Of The Tesla And SolarCity Merger
However, Musk was very vocal that Tesla will benefit from acquiring SolarCity. This is reflective of the company's statement that it predicts a $1 billion addition in revenue in 2017 with the said merger. Furthermore, its balance sheet will also gain $500 million in cash over the next three years, according to Bloomberg.
Te transaction will allow SolarCity shareholders to receive 0.11 of a Tesla share for each share of SolarCity that they own, according to The New York Times. The announcement of this merger has benefited SolarCity as its shares rose 2 percent in after-hours trading.
Solar Roofs Integrated With Electric Cars
What Musk said during his meeting with the shareholders is his vision for these two companies. It has become even more possible now to integrate SolarCity's solar roof with Tesla's electric cars. The idea of such product might be an answer to save SolarCity. Likewise, it will propel Tesla Motors to higher heights in the automotive industry.
It should be noted that Tesla is up against already well-established automakers like Toyota, Ford, and BMW. Tesla previously introduced a glass roof option for its Model S sedan. This is after it had unveiled new solar roof panels. The automaker is looking to further glass technology in the automotive industry.