In a deal that Elon Musk has dubbed a "no brainer," Tesla Motors has made an offer to acquire solar installation company SolarCity in a stock deal worth a reported $2.8 billion.
The electric car company made the announcement Tuesday and explained the offer in a blog post:
Tesla’s mission has always been tied to sustainability. We seek to accelerate the world’s transition to sustainable transportation by offering increasingly affordable electric vehicles. And in March 2015, we launched Tesla Energy, which through the Powerwall and Powerpack allow homeowners, business owners and utilities to benefit from renewable energy storage.
It’s now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun.
“The world does not look for another car company, the world looks for sustainable energy companies,” Musk told reporters in a conference call on Tuesday.
The prolific entrepreneur is the chairman of SolarCity, which was founded and is operated by his cousins, Lyndon Rive and Peter Rive. Musk is the largest individual shareholder of both companies, with 21.3 percent of Tesla and 22 percent of SolarCity, according to estimates.
SolarCity is the top residential solar installer in the country. Its customers pay for the panels with a monthly fee that's typically less than what they would pay to the power company. A marriage between the two companies would seamlessly tie SolarCity's panels with Tesla's Powerwall batteries. Having a solar-plus-storage system installed by a single company would allow an easier transition to customers to unhook themselves from a carbonized grid.
This morning, in a conference call to reporters and shareholders, Musk further discussed the rationale behind the offer. He said that the idea of consolidating Tesla and SolarCity "has been floated over the years" and it would be “extremely unwieldy” to operate as two companies.
Tesla makes offer to acquire SolarCity https://t.co/bo6TaeGvCJ— Tesla (@Tesla)1466544004.0
In its blog post, Tesla listed off a number of "significant benefits to our shareholders, customers and employees" if the deal is completed:
- We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered. With your Model S, Model X, or Model 3, your solar panel system, and your Powerwall all in place, you would be able to deploy and consume energy in the most efficient and sustainable way possible, lowering your costs and minimizing your dependence on fossil fuels and the grid.
- We would be able to expand our addressable market further than either company could do separately. Because of the shared ideals of the companies and our customers, those who are interested in buying Tesla vehicles or Powerwalls are naturally interested in going solar, and the reverse is true as well. When brought together by the high foot traffic that is drawn to Tesla’s stores, everyone should benefit.
- We would be able to maximize and build on the core competencies of each company. Tesla’s experience in design, engineering, and manufacturing should help continue to advance solar panel technology, including by making solar panels add to the look of your home. Similarly, SolarCity’s wide network of sales and distribution channels and expertise in offering customer-friendly financing products would significantly benefit Tesla and its customers.
- We would be able to provide the best possible installation service for all of our clean energy products. SolarCity is the best at installing solar panel systems, and that expertise translates seamlessly to the installation of Powerwalls and charging systems for Tesla vehicles.
- Culturally, this is a great fit. Both companies are driven by a mission of sustainability, innovation, and overcoming any challenges that stand in the way of progress.
“This is what the world needs ... this is Earth’s solution,” Musk said of the merger this morning. Musk has long been a champion solar energy and highly critical of fossil fuels and the fossil fuel industry.
“We have to look back on gas engine cars like we look back on steam engines,” as well as power from fossil fuels, Musk added.
The fact that Musk has the biggest slice of both companies leaves Musk in a bit of an awkward situation, media reports have noted. Electrek explained that the offer to SolarCity "will be contingent on a vote from the shareholders and Musk will abstain from voting his shares due to his vested interest in the deal."
Analysts and investors do not appear happy with the plan. Reuters reported that Tesla’s stock price spiraled more than 13 percent to $189.99 following the announcement yesterday. At the same time however, shares of SolarCity soared about 18 percent to $25.02.
This is what happened to the stocks after Tesla announced its bid for SolarCity https://t.co/KJfj1sc7jZ https://t.co/bjPgHbKmVv— MarketWatch (@MarketWatch)1466602282.0
Electrek also observed that shareholders are "calling the deal a 'bailout' of SolarCity, especially after Musk bought another $10 million worth of shares last year—before the stock fell 60 percent in 2016."
SolarCity is also in an ongoing battle against regulators and utilities in states that are unfriendly to rooftop solar, aka the "solar wars" in Nevada over net metering, which allows homeowners to offset the cost of their panels by selling any electricity they don’t use back to the grid. Nevada's NV Energy has been fighting these policies tooth and nail.
Musk, however, shot down the idea of a “bailout” of SolarCity, calling it a “false description.”
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Here are three new films to watch this Earth Week that will transport you from pole to pole and introduce you to the scientists and activists working to save our shared home.
1. The Year Earth Changed
Where to Watch: Apple TV+
When to Watch: From April 16
The coronavirus pandemic has brought home the stakes of humanity's impact on the environment. But the lockdowns also proved how quickly nature can recover when humans give it the space. Birds sang in empty cities, whales surfaced in Glacier Bay and capybara roamed the South American suburbs.
The Year Earth Changed captures this unique year with footage from more than 30 lockdowned cities between May 2020 to January 2021. Narrated by renowned wildlife broadcaster David Attenborough, the film explores what positive lessons we can take from the experience of a quieter, less trafficked world.
"What the film shows is that the natural world can bounce back remarkably quickly when we take a step back and reduce our impact as we did during lockdown," executive producer Alice Keens-Soper of BBC Studios Natural History Unit told EcoWatch. "If we are willing to make even small changes to our habits, the natural world can flourish. We need to learn how to co-exist with nature and understand that we are not separate from it- for example if we closed some of our beaches at for a few weeks during the turtle breeding we see that it can make a huge difference to their success. There are many ways that we can adapt our behavior to allow the natural world to thrive as it did in lockdown."
2. After Antarctica
Where to Watch: San Francisco International Film Festival
When to Watch: 12 a.m. PST April 9 to 11:59 p.m. April 18
In 1989, Will Steger led an international team of six scientists and explorers to be the first humans to cross Antarctica by dogsled. Steger and his team weren't just in it for the adventure. They also wanted to draw attention to the ways in which the climate crisis was already transforming the icy continent and to rally support for the renewal of the Antarctic Treaty, which would keep the continent safe from extractive industries.
In After Antarctica, award-winning filmmaker Tasha Van Zandt follows Steger 30 years later as he travels the Arctic this time, reflecting on his original journey and once again bringing awareness to changes in a polar landscape. The film intersperses this contemporary journey with footage from the original expedition, some of which has never been seen before.
"Will's life journey as an explorer and climate activist has led him not only to see more of the polar world than anyone else alive today, but to being an eyewitness to the changes occurring across both poles," Van Zandt told EcoWatch. "But now, these changes are happening in all of our own backyards and we have all become eyewitnesses. Through my journey with Will, I have learned that although we cannot always control change, we can change our response. I feel strongly that this is a message that resonates when we look at the current state of the world, as we each have power and control over how we choose to respond to hardships, and we all have the power to unite with others through collective action around a common goal."
After Antarctica is available to stream once you purchase a ticket to the San Francisco International Film Festival. If you miss it this weekend, it will screen again at the Minneapolis St. Paul International Film Festival from May 13 to May 23.
Tasha Van Zandt
3. The Race to Save the World
Where to Watch: Virtual Cinema
When to Watch: From Earth Day, April 22
While many films about the climate crisis seek to raise awareness about the extent of the problem, The Race to Save the World focuses on the people who are trying to stop it. The film tells the story of climate activists ranging from 15-year-old Aji to 72-year-old Miriam who are working to create a sustainable future. It follows them from the streets to the courtroom to their homes, and explores the impact of their advocacy on their personal lives and relationships.
Emmy award-winning documentary filmmaker Joe Gantz told EcoWatch that he wanted to make a film about climate change, but did not want to depress viewers with overwhelming statistics. Instead, he chose to inspire them by sharing the stories of people trying to make a difference.
"Unless millions of people take to the streets and make their voices heard for a livable future, the politicians are not going to get on board to help make the changes needed for a sustainable future," Gantz told Ecowatch. "I think that The Race To Save The World will energize and inspire people to take action so that future generations, as well as the plants, animals and ecosystems, can survive and thrive on this planet."
Check back with EcoWatch on the morning of Earth Day for a special preview of this inspiring film!
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