7 ms·

Tesla and Solar City Combine

275 points by chasingtheflow 10y ago

drwdal 10y ago
I don't particularly see this as a bad thing, since they'll be able to add more Supercharger stations for the future.
- jonknee 10y ago
  How will this allow them to add more Supercharger stations? This will eat up their free cash flow which will actually allow for less spending on things like Supercharger stations.
- mdorazio 10y ago
  I don't think you appreciate how much power is required for a supercharger station. Put it this way - if you had a SolarCity panel array the size of a Model S, it would produce enough power in a good day to add about 35 miles of range to a single car. Multiply that by the amount most people are actually charging when they pull in, and the number of cars utilizing a charger. It's just not even close to practical unless you cover the entire roof of a nearby building, and then you would need a huge battery somewhere to store the collected power for charging at night. Supercharger stations connect to the grid for a good reason.
thisisbad 10y ago
Elon Musk with Tesla, SolarCity & SpaceX is similar to Eike Batista and his many businesses (OGX, MPX, LLX etc.) [1] I wonder if Musk's companies will end up like Batista's. What do you think? [1] http://www.dssk.press/elon-musk-is-an-obvious-fraud/ http://www.dssk.press/elon-musk-is-an-obvious-fraud/
- mikeash 10y ago
  Except that Musk currently only has two, and both are doing quite well and delivering on their promises (aside from deadlines, which they miss with reckless abandon). Hard to see how he's an "obvious fraud" when he's landing rockets on ships and selling tens of thousands of enormously expensive cars per year.
  - thisisbad 10y ago
    Except that Musk currently only has two... Batista had one EBX Group and the ones mentioned were subsidiaries. ...both are doing quite well and delivering on their promises They are not profitable, which means they are not doing well. ...he's landing rockets on ships and selling tens of thousands of enormously expensive cars per year. Batista's companies were drilling for oil, doing construction, shipping and many other things.
    - synaesthesisx 10y ago
      This is America, where profits are irrelevant (take a look at any of the recent companies with multi-billion dollar valuations that surely aren't on that level of profitability).
    - mikeash 10y ago
      SpaceX is profitable. Tesla is not, but only because they want to take over the world. If they concentrated on being a niche high-end car maker they'd already be profitable. According to your link, Batista's companies never did the quantities they needed or said they would. The oil drilling didn't produce much oil, the drilling equipment manufacturer didn't sell much equipment, and the shipping company didn't do much shipping. What's the Elon Musk equivalent to "Batista’s oil wells only pumped 1/50th of the barrels he predicted they would"? Tesla said they'd sell 50-60,000 cars last year, and they sold somewhat over 50,000, not 1,000. SpaceX said they want to do 18 launches this year, so far they're on track for more like 12, but certainly not 0.36.
      - AJ007 10y ago
        Really Batista is like an anti-Musk. I'm not sure I could find two billionaires(ex-billionaire) who were further apart. Charlie Munger's quote I read in Poor Charlie's Almanack a really long time ago resonated with me pretty well when I saw Batista being interviewed on Charlie Rose years back. “Bernie Ebbers and Ken Lay were caricatures – they were easy to spot. They were almost psychopaths." * Since no copy of the book online, https://25iq.com/charlie-munger-book-to-date-chapters-1-5/ https://25iq.com/charlie-munger-book-to-date-chapters-1-5/
impostervt 10y ago
This is the first move by Musk that I feel is a bit shady. It seems like it's in his best interest, from what I've read, but maybe not in every one else's... Though the hyperloop is a bit shady too. I guess he's not really involved in it anymore though. https://www.youtube.com/watch?v=DDwe2M-LDZQ https://www.youtube.com/watch?v=DDwe2M-LDZQ
- alex_duf 10y ago
  I think hyperloop is the product of mismanaged communication. People need to move on about this one, not much to see. Tesla and Solar City on the other hand seems to make perfect sense. Why do you think it's shady? (ahah, shady, solar...)
  - yaakov34 10y ago
    Musk is the biggest shareholder in SolarCity, and his cousins are the top managers (and also shareholders) there. The decision to merge SolarCity with the much more powerful Tesla ensures the future of SolarCity, at least in the medium term. SolarCity was losing money and thought to be in trouble. That said, it's not like the conflict of interest is a secret. Musk is going to get the deal approved by Tesla shareholders. Personally, I would be more skeptical in their place, but apparently they are fairly enthusiastic about it. So whatever, more power to him and to them.
    - sreya 10y ago
      Don't know if it's relevant but Tesla admitted that only 2 individuals on the board didn't also have ties to Solar City, so hearing that shareholders are enthusiastic about the merge wouldn't be surprising I wouldn't think
    - kbenson 10y ago
      I don't think it's "shady", I think possibly Musk has a different outlook that's much longer than what most people are considering. He's made no effort to hide that he thinks are the major technologies needed to solve some global problems. Even if he's propping Solar City up, his belief that solar is essential in the future can mean that be believes he's also acting in the best interest of everyone involved. Solar City has a large share of the US solar market, and letting that go to waste when there may be plenty of ways to capitalize on that in a few years would be wasteful.
afsina 10y ago
They lost me on ".. achieve cost synergies .."
- Diederich 10y ago
  Why?
  - jacquesm 10y ago
    Because those typically do not get realized and yet will result in a sizable number of lay-offs.
    - mnx 10y ago
      Well, if you made layoffs, and both companies continue operating, haven't you saved money?
      - jacquesm 10y ago
        It could, but in practice that rarely - if ever - actually happens. Usually the synergies translate into fewer people working longer hours and wasting of money elsewhere in the now doubled org. For Tesla and Solar City the overhead could come from simply not operating similar enough companies to allow much in terms of integration. In the longer term it could even cost money. Such talk is usually just a way to butter up investors ahead of a deal, it's just part of the sales process.
        tcoppi 10y ago
        Since both Solar City and Tesla are burning cash right now, I highly suspect Solar City is going to face a massive layoff of their sales staff and massive cut to marketing, which is where a majority of their costs are right now. With that gone, Solar City might be profitable, or at least close to break-even, based on existing solar installs. That's what Tesla is probably hoping for anyway, I highly doubt it will work out quite that nicely. This seems like a highly risky acquisition from a financial perspective for both companies.
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chollida1 10y ago
link to the investor presentation if you want to read it: http://files.shareholder.com/downloads/ABEA-4CW8X0/2547646221x0x902286/19938ABD-D64F-4DEA-A3DB-9116D79CCA5E/Investor_Presentation_Final.pdf http://files.shareholder.com/downloads/ABEA-4CW8X0/254764622... After the deal closes, expected to be Q4 2016, the ownership split will be: 93.5% Tesla / 6.5% SolarCity Interestingly, this is an all shares deal. With most people assuming Telsa will need to raise another large round soon to fund full scale production of the Model 3 it will be interesting to see what sort of terms, if any, Tesla will need to give investors to raise. Current shareholders don't seem too put off the by constant dilution of this acquisition or the constant equities raises. Tesla's short interest is high as always, so they continue to be one of the most polarizing companies around:) Fun note in the presentation, Solar City has a shop window in the deal where they can take this deal and shop it to other companies to try and get a better deal. Anyone want to take a bet as to whether or not they actually try and shop this deal at all?
- jaynos 10y ago
  As a Solar City shareholder, I think I'm getting screwed. Solar City, at $26.70/share last Friday has a lot more upside than TSLA at ~$235. Hell, I lost almost 5% over the weekend due to where they priced this deal.
  - toomuchtodo 10y ago
    You're only getting screwed if a higher offer isn't made by someone else. Disclaimer: TSLA investor.
  - coliveira 10y ago
    You're completely right. TSLA investors are being used to save a company with uncertain future.
    - thaumasiotes 10y ago
      Except jaynos is claiming the opposite -- that Solar City shareholders are getting screwed over to benefit Tesla shareholders. It's easy to understand your point of view; jaynos's is a little more mysterious.
perseusprime11 10y ago
They had to...remember the recently unveiled master plan?
manmal 10y ago
Can anyone explain to me why SolarCity's stock is going down right now? (-5,2% in the last 24h).
- tcoppi 10y ago
  The offer values solarcity at $25.37, so that's effectively a new ceiling on the price, unless new info surfaces. Edit: Since this is an all-stock deal, the valuation and hence price is going to float based on TSLA's price, at a ratio of .11 * TSLA = SCTY price.
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mhurron 10y ago
... to form Voltron. Look, I could not help but make that stupid joke when it fits so well.
overcast 10y ago
Wasn't this basically expected/intended/inevitable? Considering Musk was one of the founders, along with his cousins that currently run it.
- adwn 10y ago
  > Considering Musk was one of the founders, along with his cousins that currently run it. Are you implying nepotism? Would you have said that it was "basically expected" if neither Musk nor his cousins would have been involved in SolarCity?
  - overcast 10y ago
    That's what I'm implying. Certainly didn't decrease the chances of this.
  - jonknee 10y ago
    This deal certainly would not have happened if Musk wasn't a giant shareholder and the Chairman of SolarCity. It makes very little sense on paper (SCTY loses a ton of money and TSLA needs every dollar it has plus a lot more to invest for the Model 3).
    - kbenson 10y ago
      > It makes very little sense on paper I'm never sure how I'm supposed to interpret "on paper". Purely on current financials? That seems a poor way to plan IMO. There seem to be quite a few ways to market to each others customers and provide a more comprehensive "package" with this deal. I imagine we'll see car + powerwall + solar packages marketed directly soon.
      - overcast 10y ago
        You couldn't get those combo packages without a merger?
        10y ago
icc97 10y ago
Brand wise I can certainly see how this is beneficial to Solar City. Tesla as a brand has taken off hugely, so I can see it being easier to sell 'Tesla Solar' which is an easy benefit to Solar City as a company. Certainly for any global expansion, I don't think many people outside the US know about Solar City. Where I am in Belgium, Tesla cars are about as prevelant on the roads as Range Rovers and everyone from my nephew to my mother in law knows about it. As they also say it's a way to get people to the Tesla Stores which should benefit Tesla in a similar way to Apple stores.
- bdcravens 10y ago
  Tesla's end game isn't automobiles.
  - Teever 10y ago
    It is my personal hunch that Musk is attempting to do something very unorthodox. He is attempting to create a Von Neumann probe. But it's no easy endeavor. So he has to monetize and publicize the whole affair. But if you tell people that you're making a Von Neumann probe people will either have no idea what you're talking about or think you're crazy. So he's sell the public on the idea of rockets. hes selling them on the idea of electric cars. He's even somehow made batteries that mount on the wall of their garages exciting. And the even crazier thing is that he's selling them himself and somehow making that interesting. But what he's really building with all of this is a Von Neumann probe. The interesting thing with SpaceX, Tesla and Solarcity aren't the products -- it's the factories that make them. How long until he can use these factories to make more factories and they can fit into a rocket I wonder?
    - yolesaber 10y ago
      Musk right now is playing Civ 5 and once he gets the Space victory he's gonna move right on to Alpha Centauri
      - toomuchtodo 10y ago
jharohit 10y ago
I wonder if they combine these two with SpaceX - Elon Musk might well become the first trillionaire.
- gremlinsinc 10y ago
  It's amazing to think that his businesses all revolve around saving the human race... -- SpaceX is designed with the mission of getting a colony on Mars as a backup for humanity. Solar and Tesla are designed to save the planet we now live on.
  - jharohit 10y ago
    i think its more of a thing that happened in retrospect. Tesla was not started by him and neither was Solar City. And SpaceX only came about because we wanted to see how we can grow plants on Mars. So even his vision of Mars as a contingency for humans is something that got derived over the years. I guess it's just good luck for him that his interests did somehow connect together really well.
- swalsh 10y ago
  Of the educated people who are concerned about climate change, musk seems to be the only one taking a practical "let's do something about it in a very large way". Solving the problem is worth many trillions of dollars (it's literally a future with dollars vs a future without). If he is successful, he'll become that trillionaire, and it's something he's earned.
- visakanv 10y ago
  I've always imagined that the first trillionaire will be the person responsible for asteroid mining – and SpaceX does seem to have a good shot at doing that.
  - boznz 10y ago
    Once SpaceX have a big enough rocket the whole solar system will be Elon's bitch... Bring on the real space age!
sebringj 10y ago
Lock-in on old tech has been the main worry for me in terms of installing panels on my home. An upgrade option would be a done deal for me, especially since its Tesla.
yladiz 10y ago
I wonder if this will be approved by the shareholders, considering that Solar City is losing $300 million in value and it is an all shares merger. I'm hesitant to say it'll go through since I don't think investors like the news, as both stocks are down today and both took a huge hit around when this was announced (Telsa was -2%, but bounced back to -0.5% and Solar City is currently -6%, and falling).
- zwily 10y ago
  SCTY was trading around $22 when the merger was first announced back in June.
- Florin_Andrei 10y ago
  If they don't approve it, they're short-sighted. The model makes a lot of sense in the long run.
- analyst74 10y ago
  Looks like those who don't approve the deal and those who do both voted with their money.
nstj 10y ago
Elon taking delivery of a McLaren F1 in 1999 [0]. Quite prescient really. [0]: https://www.youtube.com/watch?v=kSHUha9ABNY https://www.youtube.com/watch?v=kSHUha9ABNY
- visakanv 10y ago
  What's prescient?
swalsh 10y ago
Electric cars are filled with potential to have a decently large positive ecological impact, but as long as they're running on electricity generated by coal, they're just shifting the source of emissions. However, even if we did move ALL cars off gas, the emissions problem is still very large, and solving it could reduce emissions by 65% [1]. This seems to be a 2 pronged approach, reduce car emissions, and reduce generic energy emissions. This alone won't solve the crisis, but it's a significant contribution. https://www3.epa.gov/climatechange/ghgemissions/global.html https://www3.epa.gov/climatechange/ghgemissions/global.html
- mikeash 10y ago
  The amount of electricity generated by coal is down significantly in the US. In 1997 it was almost 53%. Today it's around 33%. So that change is happening. Based on my local grid, my car runs on roughly one third coal, one third natural gas, and one third nuclear. This seems pretty good, especially as it seems like the coal part will continue to decrease throughout the lifetime of the car. Of course, with SolarCity joining Tesla, soon you'll be able to get both the car and the energy to run that car from the same company. Assuming your living situation allows for solar power, anyway.
- ianai 10y ago
  In a forum frequented by as many developers and engineers as this place I would expect a concept like decoupling to be better recognized. You switch the energy generation away from consumption. Your individual car is then out of the problem.
- mjevans 10y ago
  Even assuming coal, at least it is easier to install proper scrubbing in large fixed installations like generation plants. I'm not sure about the tradeoff in efficiency between electricity transmission and generation in larger capacity: I'm just going to assume the cost and benefit in this set cancel out since we have more larger installations than local power generation.
  - ianai 10y ago
ww520 10y ago
I just want to know what the cost is now for a combined solar panel installation and battery storage for couple days of home use. I assume the Tesla/Solar City deal make more sense with the combine of solar installation plus the Gigafactory, rather than with Tesla the car.
- wubwubwomp 10y ago
  And I want to know how much users are willing to pay for it. Or if it'll be a energy escrow kind of deal.
CptJamesCook 10y ago
Does Solar City have plans to go beyond the leasing model?
- Nelson69 10y ago
  I believe they will sell you a system outright and they had a long term financing option called "MyPower" but I think that's been stopped. They sold bonds to cover those loans. The lease is probably the most popular. Until there is some sort of expandable DIY option that you can gradually grow out, I think the only really popular way to sell these systems will be either baked in to the mortgage or with leases and creative financing. The lease and financing does seem to frighten a lot of people though, SolarCity modeled loan payments off energy use and in the contract there is even a clause that says if there is a prolonged non-sunny period, you might owe a large chunk on the loan when it comes due...
bronz 10y ago
to all the people who are saying that this is shady or that this resembles fraud: what the hell are you thinking? here is a man who twice bet his personal fortune on these companies with no other apparent motive besides making the world a better place. in the case of tesla, elon musk could have lost not only his fortune but everything. if elon musk wanted to make more money he could have done it in other ways with much less risk. founding spacex and tesla only make sense if there was some genuine desire to make the world a better place. a man who put everything on the line for these visions and nearly lost everything would, upon surpassing everyones expecations or even their wildest dreams, suddenly become a shady fraudster and initiate a shady scheme to make a little money? that makes no sense. i get so mad at people who are constantly detracting from tesla or evs in general. it is so ironic that the one company that isnt trying to fuck people over, perhaps the only large company that has nothing but the betterment of the world on the agenda, is constantly berated and dismissed by everyone.
- devishard 10y ago
  > here is a man who twice bet his personal fortune on these companies with no other apparent motive besides making the world a better place. That has to be the most naive statement I've seen on Hacker News.
  - raldi 10y ago
    That insult would be more impactful if backed up with an explanation of why you feel that way. And, once that explanatory paragraph was written, you could remove the insult and just let it stand on its own.
    - forgetsusername 10y ago
      What evidence did the OP provide?
    - deleted 10y ago
      [deleted]
    - devishard 10y ago
ilaksh 10y ago
Maybe you could just use your car as the battery charged by your solar panels, instead of buying a Powerwall? And then run your house off of it. At least on the weekends. Or maybe more often if you don't have to drive every day. Because the Tesla battery is 60 kW, so its basically like 10 Powerwalls that you can drive around. Instead of storing it on the wall in your garage, it is lying horizontal in the car. Sort of amazing that people are not making this connection.
- kbenson 10y ago
  I suspect a fair portion of people actually use their car to go other places during most of the day, which is when Solar is working. A car makes a poor battery because it's absent when you would want to charge it.
- mulcahey 10y ago
  Elon and JB said in the 2016 Shareholders meeting that they considered this but are not planning to pursue it. The PowerWall is designed to be cycled daily while the car is expected to be cycled weekly. There is also a danger of electrocution and regulatory hurdles. https://youtu.be/vhqe4gMN6Lk?t=2h46m32s https://youtu.be/vhqe4gMN6Lk?t=2h46m32s
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jeffmanu 10y ago
What I like about this is that it's an integration of Elon's ethos. If you owned Starbucks and the biggest coffee plantation wouldn't you find a way to merge them?

275 points by chasingtheflow 10y ago

drwdal 10y ago

I don't particularly see this as a bad thing, since they'll be able to add more Supercharger stations for the future.

jonknee 10y ago
How will this allow them to add more Supercharger stations? This will eat up their free cash flow which will actually allow for less spending on things like Supercharger stations.
mdorazio 10y ago
I don't think you appreciate how much power is required for a supercharger station. Put it this way - if you had a SolarCity panel array the size of a Model S, it would produce enough power in a good day to add about 35 miles of range to a single car. Multiply that by the amount most people are actually charging when they pull in, and the number of cars utilizing a charger. It's just not even close to practical unless you cover the entire roof of a nearby building, and then you would need a huge battery somewhere to store the collected power for charging at night. Supercharger stations connect to the grid for a good reason.

thisisbad 10y ago

Elon Musk with Tesla, SolarCity & SpaceX is similar to Eike Batista and his many businesses (OGX, MPX, LLX etc.) [1] I wonder if Musk's companies will end up like Batista's. What do you think? [1] http://www.dssk.press/elon-musk-is-an-obvious-fraud/ http://www.dssk.press/elon-musk-is-an-obvious-fraud/

mikeash 10y ago
Except that Musk currently only has two, and both are doing quite well and delivering on their promises (aside from deadlines, which they miss with reckless abandon). Hard to see how he's an "obvious fraud" when he's landing rockets on ships and selling tens of thousands of enormously expensive cars per year.
- thisisbad 10y ago
  Except that Musk currently only has two... Batista had one EBX Group and the ones mentioned were subsidiaries. ...both are doing quite well and delivering on their promises They are not profitable, which means they are not doing well. ...he's landing rockets on ships and selling tens of thousands of enormously expensive cars per year. Batista's companies were drilling for oil, doing construction, shipping and many other things.
  - synaesthesisx 10y ago
    This is America, where profits are irrelevant (take a look at any of the recent companies with multi-billion dollar valuations that surely aren't on that level of profitability).
  - mikeash 10y ago
    SpaceX is profitable. Tesla is not, but only because they want to take over the world. If they concentrated on being a niche high-end car maker they'd already be profitable. According to your link, Batista's companies never did the quantities they needed or said they would. The oil drilling didn't produce much oil, the drilling equipment manufacturer didn't sell much equipment, and the shipping company didn't do much shipping. What's the Elon Musk equivalent to "Batista’s oil wells only pumped 1/50th of the barrels he predicted they would"? Tesla said they'd sell 50-60,000 cars last year, and they sold somewhat over 50,000, not 1,000. SpaceX said they want to do 18 launches this year, so far they're on track for more like 12, but certainly not 0.36.
    - AJ007 10y ago
      Really Batista is like an anti-Musk. I'm not sure I could find two billionaires(ex-billionaire) who were further apart. Charlie Munger's quote I read in Poor Charlie's Almanack a really long time ago resonated with me pretty well when I saw Batista being interviewed on Charlie Rose years back. “Bernie Ebbers and Ken Lay were caricatures – they were easy to spot. They were almost psychopaths." * Since no copy of the book online, https://25iq.com/charlie-munger-book-to-date-chapters-1-5/ https://25iq.com/charlie-munger-book-to-date-chapters-1-5/

impostervt 10y ago

This is the first move by Musk that I feel is a bit shady. It seems like it's in his best interest, from what I've read, but maybe not in every one else's... Though the hyperloop is a bit shady too. I guess he's not really involved in it anymore though. https://www.youtube.com/watch?v=DDwe2M-LDZQ https://www.youtube.com/watch?v=DDwe2M-LDZQ

alex_duf 10y ago
I think hyperloop is the product of mismanaged communication. People need to move on about this one, not much to see. Tesla and Solar City on the other hand seems to make perfect sense. Why do you think it's shady? (ahah, shady, solar...)
- yaakov34 10y ago
  Musk is the biggest shareholder in SolarCity, and his cousins are the top managers (and also shareholders) there. The decision to merge SolarCity with the much more powerful Tesla ensures the future of SolarCity, at least in the medium term. SolarCity was losing money and thought to be in trouble. That said, it's not like the conflict of interest is a secret. Musk is going to get the deal approved by Tesla shareholders. Personally, I would be more skeptical in their place, but apparently they are fairly enthusiastic about it. So whatever, more power to him and to them.
  - sreya 10y ago
    Don't know if it's relevant but Tesla admitted that only 2 individuals on the board didn't also have ties to Solar City, so hearing that shareholders are enthusiastic about the merge wouldn't be surprising I wouldn't think
  - kbenson 10y ago
    I don't think it's "shady", I think possibly Musk has a different outlook that's much longer than what most people are considering. He's made no effort to hide that he thinks are the major technologies needed to solve some global problems. Even if he's propping Solar City up, his belief that solar is essential in the future can mean that be believes he's also acting in the best interest of everyone involved. Solar City has a large share of the US solar market, and letting that go to waste when there may be plenty of ways to capitalize on that in a few years would be wasteful.

afsina 10y ago

They lost me on ".. achieve cost synergies .."

Diederich 10y ago
Why?
- jacquesm 10y ago
  Because those typically do not get realized and yet will result in a sizable number of lay-offs.
  - mnx 10y ago
    Well, if you made layoffs, and both companies continue operating, haven't you saved money?
    - jacquesm 10y ago
      It could, but in practice that rarely - if ever - actually happens. Usually the synergies translate into fewer people working longer hours and wasting of money elsewhere in the now doubled org. For Tesla and Solar City the overhead could come from simply not operating similar enough companies to allow much in terms of integration. In the longer term it could even cost money. Such talk is usually just a way to butter up investors ahead of a deal, it's just part of the sales process.
      - tcoppi 10y ago
        Since both Solar City and Tesla are burning cash right now, I highly suspect Solar City is going to face a massive layoff of their sales staff and massive cut to marketing, which is where a majority of their costs are right now. With that gone, Solar City might be profitable, or at least close to break-even, based on existing solar installs. That's what Tesla is probably hoping for anyway, I highly doubt it will work out quite that nicely. This seems like a highly risky acquisition from a financial perspective for both companies.

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chollida1 10y ago

link to the investor presentation if you want to read it: http://files.shareholder.com/downloads/ABEA-4CW8X0/2547646221x0x902286/19938ABD-D64F-4DEA-A3DB-9116D79CCA5E/Investor_Presentation_Final.pdf http://files.shareholder.com/downloads/ABEA-4CW8X0/254764622... After the deal closes, expected to be Q4 2016, the ownership split will be: 93.5% Tesla / 6.5% SolarCity Interestingly, this is an all shares deal. With most people assuming Telsa will need to raise another large round soon to fund full scale production of the Model 3 it will be interesting to see what sort of terms, if any, Tesla will need to give investors to raise. Current shareholders don't seem too put off the by constant dilution of this acquisition or the constant equities raises. Tesla's short interest is high as always, so they continue to be one of the most polarizing companies around:) Fun note in the presentation, Solar City has a shop window in the deal where they can take this deal and shop it to other companies to try and get a better deal. Anyone want to take a bet as to whether or not they actually try and shop this deal at all?

jaynos 10y ago
As a Solar City shareholder, I think I'm getting screwed. Solar City, at $26.70/share last Friday has a lot more upside than TSLA at ~$235. Hell, I lost almost 5% over the weekend due to where they priced this deal.
- toomuchtodo 10y ago
  You're only getting screwed if a higher offer isn't made by someone else. Disclaimer: TSLA investor.
- coliveira 10y ago
  You're completely right. TSLA investors are being used to save a company with uncertain future.
  - thaumasiotes 10y ago
    Except jaynos is claiming the opposite -- that Solar City shareholders are getting screwed over to benefit Tesla shareholders. It's easy to understand your point of view; jaynos's is a little more mysterious.

perseusprime11 10y ago

They had to...remember the recently unveiled master plan?

manmal 10y ago

Can anyone explain to me why SolarCity's stock is going down right now? (-5,2% in the last 24h).

tcoppi 10y ago
The offer values solarcity at $25.37, so that's effectively a new ceiling on the price, unless new info surfaces. Edit: Since this is an all-stock deal, the valuation and hence price is going to float based on TSLA's price, at a ratio of .11 * TSLA = SCTY price.

deleted 10y ago

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mhurron 10y ago

... to form Voltron. Look, I could not help but make that stupid joke when it fits so well.

overcast 10y ago

Wasn't this basically expected/intended/inevitable? Considering Musk was one of the founders, along with his cousins that currently run it.

adwn 10y ago
> Considering Musk was one of the founders, along with his cousins that currently run it. Are you implying nepotism? Would you have said that it was "basically expected" if neither Musk nor his cousins would have been involved in SolarCity?
- overcast 10y ago
  That's what I'm implying. Certainly didn't decrease the chances of this.
- jonknee 10y ago
  This deal certainly would not have happened if Musk wasn't a giant shareholder and the Chairman of SolarCity. It makes very little sense on paper (SCTY loses a ton of money and TSLA needs every dollar it has plus a lot more to invest for the Model 3).
  - kbenson 10y ago
    > It makes very little sense on paper I'm never sure how I'm supposed to interpret "on paper". Purely on current financials? That seems a poor way to plan IMO. There seem to be quite a few ways to market to each others customers and provide a more comprehensive "package" with this deal. I imagine we'll see car + powerwall + solar packages marketed directly soon.
    - overcast 10y ago
      You couldn't get those combo packages without a merger?
      - 10y ago

icc97 10y ago

Brand wise I can certainly see how this is beneficial to Solar City. Tesla as a brand has taken off hugely, so I can see it being easier to sell 'Tesla Solar' which is an easy benefit to Solar City as a company. Certainly for any global expansion, I don't think many people outside the US know about Solar City. Where I am in Belgium, Tesla cars are about as prevelant on the roads as Range Rovers and everyone from my nephew to my mother in law knows about it. As they also say it's a way to get people to the Tesla Stores which should benefit Tesla in a similar way to Apple stores.

bdcravens 10y ago
Tesla's end game isn't automobiles.
- Teever 10y ago
  It is my personal hunch that Musk is attempting to do something very unorthodox. He is attempting to create a Von Neumann probe. But it's no easy endeavor. So he has to monetize and publicize the whole affair. But if you tell people that you're making a Von Neumann probe people will either have no idea what you're talking about or think you're crazy. So he's sell the public on the idea of rockets. hes selling them on the idea of electric cars. He's even somehow made batteries that mount on the wall of their garages exciting. And the even crazier thing is that he's selling them himself and somehow making that interesting. But what he's really building with all of this is a Von Neumann probe. The interesting thing with SpaceX, Tesla and Solarcity aren't the products -- it's the factories that make them. How long until he can use these factories to make more factories and they can fit into a rocket I wonder?
  - yolesaber 10y ago
    Musk right now is playing Civ 5 and once he gets the Space victory he's gonna move right on to Alpha Centauri
    - toomuchtodo 10y ago

jharohit 10y ago

I wonder if they combine these two with SpaceX - Elon Musk might well become the first trillionaire.

gremlinsinc 10y ago
It's amazing to think that his businesses all revolve around saving the human race... -- SpaceX is designed with the mission of getting a colony on Mars as a backup for humanity. Solar and Tesla are designed to save the planet we now live on.
- jharohit 10y ago
  i think its more of a thing that happened in retrospect. Tesla was not started by him and neither was Solar City. And SpaceX only came about because we wanted to see how we can grow plants on Mars. So even his vision of Mars as a contingency for humans is something that got derived over the years. I guess it's just good luck for him that his interests did somehow connect together really well.
swalsh 10y ago
Of the educated people who are concerned about climate change, musk seems to be the only one taking a practical "let's do something about it in a very large way". Solving the problem is worth many trillions of dollars (it's literally a future with dollars vs a future without). If he is successful, he'll become that trillionaire, and it's something he's earned.
visakanv 10y ago
I've always imagined that the first trillionaire will be the person responsible for asteroid mining – and SpaceX does seem to have a good shot at doing that.
- boznz 10y ago
  Once SpaceX have a big enough rocket the whole solar system will be Elon's bitch... Bring on the real space age!

sebringj 10y ago

Lock-in on old tech has been the main worry for me in terms of installing panels on my home. An upgrade option would be a done deal for me, especially since its Tesla.

yladiz 10y ago

I wonder if this will be approved by the shareholders, considering that Solar City is losing $300 million in value and it is an all shares merger. I'm hesitant to say it'll go through since I don't think investors like the news, as both stocks are down today and both took a huge hit around when this was announced (Telsa was -2%, but bounced back to -0.5% and Solar City is currently -6%, and falling).

zwily 10y ago
SCTY was trading around $22 when the merger was first announced back in June.
Florin_Andrei 10y ago
If they don't approve it, they're short-sighted. The model makes a lot of sense in the long run.
analyst74 10y ago
Looks like those who don't approve the deal and those who do both voted with their money.

nstj 10y ago

Elon taking delivery of a McLaren F1 in 1999 [0]. Quite prescient really. [0]: https://www.youtube.com/watch?v=kSHUha9ABNY https://www.youtube.com/watch?v=kSHUha9ABNY

visakanv 10y ago
What's prescient?

swalsh 10y ago

Electric cars are filled with potential to have a decently large positive ecological impact, but as long as they're running on electricity generated by coal, they're just shifting the source of emissions. However, even if we did move ALL cars off gas, the emissions problem is still very large, and solving it could reduce emissions by 65% [1]. This seems to be a 2 pronged approach, reduce car emissions, and reduce generic energy emissions. This alone won't solve the crisis, but it's a significant contribution. https://www3.epa.gov/climatechange/ghgemissions/global.html https://www3.epa.gov/climatechange/ghgemissions/global.html

mikeash 10y ago
The amount of electricity generated by coal is down significantly in the US. In 1997 it was almost 53%. Today it's around 33%. So that change is happening. Based on my local grid, my car runs on roughly one third coal, one third natural gas, and one third nuclear. This seems pretty good, especially as it seems like the coal part will continue to decrease throughout the lifetime of the car. Of course, with SolarCity joining Tesla, soon you'll be able to get both the car and the energy to run that car from the same company. Assuming your living situation allows for solar power, anyway.
ianai 10y ago
In a forum frequented by as many developers and engineers as this place I would expect a concept like decoupling to be better recognized. You switch the energy generation away from consumption. Your individual car is then out of the problem.
mjevans 10y ago
Even assuming coal, at least it is easier to install proper scrubbing in large fixed installations like generation plants. I'm not sure about the tradeoff in efficiency between electricity transmission and generation in larger capacity: I'm just going to assume the cost and benefit in this set cancel out since we have more larger installations than local power generation.
- ianai 10y ago

ww520 10y ago

I just want to know what the cost is now for a combined solar panel installation and battery storage for couple days of home use. I assume the Tesla/Solar City deal make more sense with the combine of solar installation plus the Gigafactory, rather than with Tesla the car.

wubwubwomp 10y ago
And I want to know how much users are willing to pay for it. Or if it'll be a energy escrow kind of deal.

CptJamesCook 10y ago

Does Solar City have plans to go beyond the leasing model?

Nelson69 10y ago
I believe they will sell you a system outright and they had a long term financing option called "MyPower" but I think that's been stopped. They sold bonds to cover those loans. The lease is probably the most popular. Until there is some sort of expandable DIY option that you can gradually grow out, I think the only really popular way to sell these systems will be either baked in to the mortgage or with leases and creative financing. The lease and financing does seem to frighten a lot of people though, SolarCity modeled loan payments off energy use and in the contract there is even a clause that says if there is a prolonged non-sunny period, you might owe a large chunk on the loan when it comes due...

bronz 10y ago

to all the people who are saying that this is shady or that this resembles fraud: what the hell are you thinking? here is a man who twice bet his personal fortune on these companies with no other apparent motive besides making the world a better place. in the case of tesla, elon musk could have lost not only his fortune but everything. if elon musk wanted to make more money he could have done it in other ways with much less risk. founding spacex and tesla only make sense if there was some genuine desire to make the world a better place. a man who put everything on the line for these visions and nearly lost everything would, upon surpassing everyones expecations or even their wildest dreams, suddenly become a shady fraudster and initiate a shady scheme to make a little money? that makes no sense. i get so mad at people who are constantly detracting from tesla or evs in general. it is so ironic that the one company that isnt trying to fuck people over, perhaps the only large company that has nothing but the betterment of the world on the agenda, is constantly berated and dismissed by everyone.

devishard 10y ago
> here is a man who twice bet his personal fortune on these companies with no other apparent motive besides making the world a better place. That has to be the most naive statement I've seen on Hacker News.
- raldi 10y ago
  That insult would be more impactful if backed up with an explanation of why you feel that way. And, once that explanatory paragraph was written, you could remove the insult and just let it stand on its own.
  - forgetsusername 10y ago
    What evidence did the OP provide?
  - deleted 10y ago
    [deleted]
  - devishard 10y ago

ilaksh 10y ago

Maybe you could just use your car as the battery charged by your solar panels, instead of buying a Powerwall? And then run your house off of it. At least on the weekends. Or maybe more often if you don't have to drive every day. Because the Tesla battery is 60 kW, so its basically like 10 Powerwalls that you can drive around. Instead of storing it on the wall in your garage, it is lying horizontal in the car. Sort of amazing that people are not making this connection.

kbenson 10y ago
I suspect a fair portion of people actually use their car to go other places during most of the day, which is when Solar is working. A car makes a poor battery because it's absent when you would want to charge it.
mulcahey 10y ago
Elon and JB said in the 2016 Shareholders meeting that they considered this but are not planning to pursue it. The PowerWall is designed to be cycled daily while the car is expected to be cycled weekly. There is also a danger of electrocution and regulatory hurdles. https://youtu.be/vhqe4gMN6Lk?t=2h46m32s https://youtu.be/vhqe4gMN6Lk?t=2h46m32s

deleted 10y ago

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jeffmanu 10y ago

What I like about this is that it's an integration of Elon's ethos. If you owned Starbucks and the biggest coffee plantation wouldn't you find a way to merge them?