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.”
YOU MIGHT ALSO LIKE
New fossils uncovered in Argentina may belong to one of the largest animals to have walked on Earth.
- Groundbreaking Fossil Shows Prehistoric 15-Foot Reptile Tried to ... ›
- Skull of Smallest Known Dinosaur Found in 99-Million-Year Old Amber ›
- Giant 'Toothed' Birds Flew Over Antarctica 40 Million Years Ago ... ›
- World's Second-Largest Egg Found in Antarctica Probably Hatched ... ›
EcoWatch Daily Newsletter
- Pruitt Guts the Clean Power Plan: How Weak Will the New EPA ... ›
- It's Official: Trump Administration to Repeal Clean Power Plan ... ›
- 'Deadly' Clean Power Plan Replacement ›
By Jonathan Runstadler and Kaitlin Sawatzki
Over the course of the COVID-19 pandemic, researchers have found coronavirus infections in pet cats and dogs and in multiple zoo animals, including big cats and gorillas. These infections have even happened when staff were using personal protective equipment.
- Gorillas in San Diego Test Positive for Coronavirus - EcoWatch ›
- Wildlife Rehabilitators Are Overwhelmed During the Pandemic. In ... ›
- Coronavirus Pandemic Linked to Destruction of Wildlife and World's ... ›
- Utah Mink Becomes First Wild Animal to Test Positive for Coronavirus ›
By Peter Giger
The speed and scale of the response to COVID-19 by governments, businesses and individuals seems to provide hope that we can react to the climate change crisis in a similarly decisive manner - but history tells us that humans do not react to slow-moving and distant threats.
A Game of Jenga<p>Think of it as a game of Jenga and the planet's climate system as the tower. For generations, we have been slowly removing blocks. But at some point, we will remove a pivotal block, such as the collapse of one of the major global ocean circulation systems, for example the Atlantic Meridional Overturning Circulation (AMOC), that will cause all or part of the global climate system to fall into a planetary emergency.</p><p>But worse still, it could cause runaway damage: Where the tipping points form a domino-like cascade, where breaching one triggers breaches of others, creating an unstoppable shift to a radically and swiftly changing climate.</p><p>One of the most concerning tipping points is mass methane release. Methane can be found in deep freeze storage within permafrost and at the bottom of the deepest oceans in the form of methane hydrates. But rising sea and air temperatures are beginning to thaw these stores of methane.</p><p>This would release a powerful greenhouse gas into the atmosphere, 30-times more potent than carbon dioxide as a global warming agent. This would drastically increase temperatures and rush us towards the breach of other tipping points.</p><p>This could include the acceleration of ice thaw on all three of the globe's large, land-based ice sheets – Greenland, West Antarctica and the Wilkes Basin in East Antarctica. The potential collapse of the West Antarctic ice sheet is seen as a key tipping point, as its loss could eventually <a href="https://science.sciencemag.org/content/324/5929/901" target="_blank">raise global sea levels by 3.3 meters</a> with important regional variations.</p><p>More than that, we would be on the irreversible path to full land-ice melt, causing sea levels to rise by up to 30 meters, roughly at the rate of two meters per century, or maybe faster. Just look at the raised beaches around the world, at the last high stand of global sea level, at the end of the Pleistocene period around 120,0000 years ago, to see the evidence of such a warm world, which was just 2°C warmer than the present day.</p>
Cutting Off Circulation<p>As well as devastating low-lying and coastal areas around the world, melting polar ice could set off another tipping point: a disablement to the AMOC.</p><p>This circulation system drives a northward flow of warm, salty water on the upper layers of the ocean from the tropics to the northeast Atlantic region, and a southward flow of cold water deep in the ocean.</p><p>The ocean conveyor belt has a major effect on the climate, seasonal cycles and temperature in western and northern Europe. It means the region is warmer than other areas of similar latitude.</p><p>But melting ice from the Greenland ice sheet could threaten the AMOC system. It would dilute the salty sea water in the north Atlantic, making the water lighter and less able or unable to sink. This would slow the engine that drives this ocean circulation.</p><p><a href="https://www.carbonbrief.org/atlantic-conveyor-belt-has-slowed-15-per-cent-since-mid-twentieth-century" target="_blank">Recent research</a> suggests the AMOC has already weakened by around 15% since the middle of the 20th century. If this continues, it could have a major impact on the climate of the northern hemisphere, but particularly Europe. It may even lead to the <a href="https://ore.exeter.ac.uk/repository/handle/10871/39731?show=full" target="_blank" rel="noopener noreferrer">cessation of arable farming</a> in the UK, for instance.</p><p>It may also reduce rainfall over the Amazon basin, impact the monsoon systems in Asia and, by bringing warm waters into the Southern Ocean, further destabilize ice in Antarctica and accelerate global sea level rise.</p>
The Atlantic Meridional Overturning Circulation has a major effect on the climate. Praetorius (2018)
Is it Time to Declare a Climate Emergency?<p>At what stage, and at what rise in global temperatures, will these tipping points be reached? No one is entirely sure. It may take centuries, millennia or it could be imminent.</p><p>But as COVID-19 taught us, we need to prepare for the expected. We were aware of the risk of a pandemic. We also knew that we were not sufficiently prepared. But we didn't act in a meaningful manner. Thankfully, we have been able to fast-track the production of vaccines to combat COVID-19. But there is no vaccine for climate change once we have passed these tipping points.</p><p><a href="https://www.weforum.org/reports/the-global-risks-report-2021" target="_blank">We need to act now on our climate</a>. Act like these tipping points are imminent. And stop thinking of climate change as a slow-moving, long-term threat that enables us to kick the problem down the road and let future generations deal with it. We must take immediate action to reduce global warming and fulfill our commitments to the <a href="https://www.ipcc.ch/sr15/" target="_blank" rel="noopener noreferrer">Paris Agreement</a>, and build resilience with these tipping points in mind.</p><p>We need to plan now to mitigate greenhouse gas emissions, but we also need to plan for the impacts, such as the ability to feed everyone on the planet, develop plans to manage flood risk, as well as manage the social and geopolitical impacts of human migrations that will be a consequence of fight or flight decisions.</p><p>Breaching these tipping points would be cataclysmic and potentially far more devastating than COVID-19. Some may not enjoy hearing these messages, or consider them to be in the realm of science fiction. But if it injects a sense of urgency to make us respond to climate change like we have done to the pandemic, then we must talk more about what has happened before and will happen again.</p><p>Otherwise we will continue playing Jenga with our planet. And ultimately, there will only be one loser – us.</p>
By John R. Platt
The period of the 45th presidency will go down as dark days for the United States — not just for the violent insurgency and impeachment that capped off Donald Trump's four years in office, but for every regressive action that came before.
- Biden Announces $2 Trillion Climate and Green Recovery Plan ... ›
- How Biden and Kerry Can Rebuild America's Climate Leadership ... ›
- Biden's EPA Pick Michael Regan Urged to Address Environmental ... ›
- How Joe Biden's Climate Plan Compares to the Green New Deal ... ›