Tesla and Solar City Combine
tesla.comBrand 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.
Tesla's end game isn't automobiles.
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?
Musk right now is playing Civ 5 and once he gets the Space victory he's gonna move right on to Alpha Centauri
Not only is he playing Civ 5, people are willingly handing him billions of dollars to do so.
People are handing him billions of dollars for high end electric cars and to launch their payloads into space. Any game he subsequently decides to play with the money isn't really relevant to the man on the street.
For those who end up googling anyway: https://www.youtube.com/watch?v=BN-FU8VPoOc (Michio Kaku: The von Neumann Probe (A Nano Ship to the Stars)
If you found the above clip interesting and would like to learn more about the implications of such craft I highly recommend this video: https://www.youtube.com/watch?v=zQTfuI-9jIo video.
The presentation covers the viability of constructing Von Neumann probes for colonizing the entire universe and illustrates the feasibility of it with a few different technological scenarios.
All in all it seems feasible and the implications of that are enormous.
Which is yet more evidence in support of a great filter.
Perhaps, but it still doesn't answer the most important question of the great filter idea and that is 'which side of the filter are we on?'
I think another possibility worthy of serious consideration given the implication of the presentation I linked above is the existance of many bracewell probes[1] in our solar system.
If an alien civilization has the capability of seeding the universe with spacecraft it's definitely not a stretch that they would burrow them inside an asteroid to conduct subtle observations of noteworthy planets.
> which side of the filter are we on?
Well, since we can never know that for sure (even if we identify a filter, is it the filter? Is there more than one?), the best we can do is try to move forward and make it increasingly unlikely that the things we think are candidates to being a filter can effect us. First and foremost, get off-planet, which brings us full circle to Musk, who is on record as stating he started SpaceX to spur Mars colonization.
I agree with your point in general but it's worth considering that the act of getting off planet is a/the great filter.
Either because it tends to involve the development of Von Neumann probes that unexpectedly turn on their creators or because it signals to latent berserker probes sitting in the asteroid belt that we have reached a threat threshold and need to be eliminated.
Either way I agree that we need to try to get off this planet in a meaningful and permanent way.
Couldn't humanity itself be a Von Neumann probe? Send microbes to a foreign planet via asteroid that have been genetically engineered to eventually evolve into intelligent sentient beings that will naturally eventually create space travel and also their own genetically engineered microbes?
Von Newmann Probe: https://en.wikipedia.org/wiki/Self-replicating_spacecraft#Vo...
Interestingly, in discussion of scaling up manufacturing, Musk said pretty much exactly this: that the product was actually the factory, and by designing the factory itself as scaleable, reconfigurable units the end product just kind of falls out of the end.
What is it?
Revolutionize energy; they're building up the infrastructure to support it.
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.
While I'm inclined to believe Musk went into these industries (at least initially) because of fairly altruistic desires, it's important to note that this is is a narrative that originates and is promoted by him. That is, it would be foolish to make decisions based on that being true and also reflective of his current motivation without very good current evidence to back it up.
Now, I have the luxury of being able to take him at face value because I have no vested interest in any of these companies, as you may not. That said, a fair many people here do in some way or another (as a customer, an investor, or in some related market or field). It behooves them to be very critical.
>founding spacex and tesla only make sense if there was some genuine desire to make the world a better place.
You're forgetting ego. Really, your last paragraph shows you're a true believer and it's not helping the discussion.
i am passionate about evs. i have been for a long time -- before tesla and the model s. i watched electric vehicles get laughed off the stage every time they made an appearance in the media. i watched the tesla death countdown. i watched the tesla roadster get railed on top gear. at every turn it seemed as though there was a conspiracy to keep evs from ever happening. i watched the new york times drive a model s in circles in a frozen parking lot to try and make it look like the battery ran out. they didnt realize tesla was logging all of that.
so yeah, i kind of have a chip on my shoulder. its only because the success that electric vehicles are currently experiencing came after a long, tooth and nail fight led jointly by tesla and electric vehicle enthusiasts and absolutely nobody else. tesla and by extension elon musk deserve huge credit for what they have accomplished because in the end this is a victory for everyone.
I think most of HN are true believers.
Seriously in a world run by bean counters and MBA's where the only excitement is Donald Trumps next dick move or how thin the next iPhone is going to be how can you not like what this guys trying to achieve.
> Seriously in a world run by bean counters and MBA's where the only excitement is Donald Trumps next dick move or how thin the next iPhone is going to be how can you not like what this guys trying to achieve.
I have noticed some interesting parallels between some Donald Trump supporters on a certain subreddit[0] and some HNer regarding Musk (example comments up top): they both assume their hero/idol is working on an inscrutable genius masterplan which us mere mortals will retroactively understand one glorious day in the future. According to the true believers, Trump is allegedly playing 4D political chess and Musk intends to upgrade humanity to a Type II civilization... Both groups could very well be correct, but I'm cynical given the supporting evidence I currently have access to.
1. /r/the_donald - I am a non-American lefty trying to understand wtf is going on. I also like having my assumptions challenged
To those who are dubious about Musk, I have a question:
What do you think is the correct way of going about determining if a person has sincere ideals or is just a con artist?
Ideals become pretty maleable when you're in a situation of crisis (which Musk seems to have been, according to the pundits).
Things I do are good + I am in trouble financially -> Conflict of interest doesn't matter, because it's to save Important things.
It's possible to have sincere ideals and still make iffy judgement calls. The positioning makes sense, but who here would bet that this would have still happened if both companies were turning a profit?
>who here would bet that this would have still happened if both companies were turning a profit?
Do you even understand what you're saying? Solarcity 'loses' money because they invest all their profits and more into expansion. Same goes for Tesla. You should read the quarterlies and SEC notices yourself.
> It's possible to have sincere ideals and still make iffy judgement calls. The positioning makes sense, but who here would bet that this would have still happened if both companies were turning a profit?
This is not the first time this decision needed to be made: http://www.theverge.com/2015/5/14/8605597/elon-musk-discusse...
I would say the easiest way to check is if actions match the talk. If ideals are altruistic, then margins and prices should reflect the same. You cannot have 2x margins and claim your goals are idealistic.
> You cannot have 2x margins and claim your goals are idealistic.
I think that's very short sighted. If your goal actually requires a lot of resources then theoretically amassing a lot of money, or getting a lot of investor goodwill through making them a lot of money may be a way to go about it.
There may be completely different strategies required for acting on different timescales. If your plan is to achieve something in a year or two, the path may be fairly obvious to those looking on. If you are working on a timescale of decades, it may be much harder to see the plan. The quickest way between two points may be a straight line, but that doesn't mean that's the most likely way to succeed.
Now, for how this applies to Musk and Tesla, he's been very forthcoming about his eventual goals. For Tesla in the medium term, that's to prove the technology through a sports car (done), prove the automation and assembly through a factory (done), and to use this to build cars at scale and offer them much cheaper (a promise yet to be delivered on). It's not hard to see how high margins could have been useful in these prior steps. What remains to be seen is whether he actually follows through on the promise. In any case, I don't see any reason why current margins prevent an altruistic goal.
>I would say the easiest way to check is if actions match the talk.
If you look over his actions for his whole career with tesla and solarcity, he seems to be either an idealist or just a legitimate businessman. I can't see any way he is setting himself up to steal an immense amount of money from investors or customers, and run off to some place without an extradition treaty (Mars?).
>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
Maybe you should care less about the fact that people like a consumer product company less than you? And the idea that this is the "one company" not trying to fuck people over is down right ludicrous.
It's not really about how much someone likes a product. It's about the widescale famine, extinction and war on our doorstep and whether we as a planet can do anything to confine warming to a manageable rate.
Manageable being the opposite of out-of-control.
I don't get why it has to be one extreme or the other on HN. Reading through these comments Musks's either a fraudster or the second coming of Jesus.
> 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.
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.
Almost anyone can think of other apparent motivations Musk might have without my help and indeed without much thought. It doesn't require explanation.
I also think that people should be strongly discouraged from making claims like "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 statement actively decreased the quality of discussion. Hopefully bronz will think before posting in the future.
There are communities where insulting the author of a comment is an acceptable way to make an author think critically about their statement, but this is not one of them. That your comment consisted entirely of an insult and your point needed to be assumed from the subtext points towards it not being very conducive for discussion itself. That you chose to address a comment that you think lowered the quality of discussion with a comment that was even worse in that respect is unfortunate. Your goal was good, your methods were not.
Hacker News, where saying it nicely is valued more than saying anything useful.
Where discussion is prioritized over personal expression. It's not just about what you say, but about how you say it, because it doesn't matter how insightful you are if nobody understands you. It's not about being nice for niceness sake, it's about emphasizing methods of communication that work.
That depends very much on what you consider "working". I don't see any value whatsoever in what bronz was communicating, and any discussion that starts from that is going to be equally vapid. That's not "working" to me.
It's about what you say AND how you say it.
> I don't see any value whatsoever in what bronz was communicating, and any discussion that starts from that is going to be equally vapid.
That's fine. What I'm referring to doesn't actually have to yield further discussion. Some people will take belittlement, accept it as an indication they should have thought through their position better (if that was indeed the cause). Others will immediately become defensive and start responding to something that doesn't really need a response. Sometimes it just depends on the mood of the person. Not using insults (or at least making them clearly supplemental to the supported point) helps avoid this.
Insults are appeals to emotion. Emotion is exactly what you don't want when you are trying to avoid useless discussion. I understand the pull, and I'm sure I fall into the trap myself from time to time. Sometimes someone says something that seems divorced from reality, and you find the premise so absurd that you find it hard to address it seriously. It feels good to strongly call out the absurdity for what it is, and people who agree enjoy seeing it, but ultimately it makes it more about you than the point. For example, I wholeheartedly agree with the sentiment of your original comment. I just think it's slightly self defeating when the discussion is between many people in a group setting, because it often yields more useless comments as people dig in on their sides.
> It's about what you say AND how you say it.
That's the exact point I was trying to make in the prior comment.
What evidence did the OP provide?
never underestimate the cult of elon :^)
HackerNews: Build apps, expect billions in valuation.
Elon Musk: Pour fortune into building actual things, get shit on by startup culture.
Haters gonna hate.
I actually have nothing against Elon Musk. I don't expect anyone to do things completely altruistically. But it's ridiculous to claim that this is just purely altruistic.
Purely altruistic? Probably not. But spending hundreds of millions of dollars on ventures that have an extremely high likely of failure? He's definitely not in it primarily for the cash.
On what basis are you claiming that his ventures have an extremely high likelihood of failure?
> He's definitely not in it primarily for the cash.
I don't see any evidence whatsoever for this assertion.
im not a member. but perhaps he has a cult for a reason.
Perhaps people worship wealth and power, yes.
link to the investor presentation if you want to read it:
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?
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.
The dollars per share are meaningless, but SCTY was heading rapidly towards $0. I think you got the better end of the deal (I don't currently have shares in either firm).
The biggest reason SCTY went up to ~$26.70 was because of the announcement a few weeks ago (which speculated $26 to $28 buyout price).
I don't think anything unfair happened to you.
Usually buyouts like this are priced well above the current trading range of the acquisition, presumably in order quell shareholder opposition. In this case I think it is probably a more than fair price for SolarCity, even though it is lower than where it has been trading. SolarCity's future prospects at this point mostly hinge on integrating with storage technology, now that net metering is starting to get killed off slowly. Tesla can provide that, so it is only fair they get them at a bit of a discount. If someone else who can pay comes along and thinks they are worth more, they will.
What's your basis for thinking that SolarCity has more upside than Tesla?
Why would the price of the share be relevant (as opposed to e.g. the market capitalization of the company)?
I agree. I should have referenced market cap to give a useful argument. My thinking may be wrong, but here's what I have:
1. TSLA is close to it's all time high. SCTY is well below it's all time high (Granted, I don't see it going back to $80+ anytime).
2. TSLA market cap (34.5B) is 70% that of Ford (49.3B) or GM (49.7B). I know Ford and GM are probably undervalued and there are many differences between them and Tesla, but this suggests to me that Tesla is overvalued.
3. Solar City market cap is 2.4 billion. Solar City has a market share in the US of 34% (approx). Solar City market cap compared to the rest of the industry makes sense.
4. The Solar Industry is here to stay. Solar City, as the US leader, is not going bankrupt (the Tesla board of directors agrees with me on this or they would not approve the deal). Investments would swing back to SCTY at some point pushing the stock to $40-$50 (or ~4-5 billion in market cap).
If anything, Solar City is a (the?) money-making engine for Tesla now. You're correct that your investment is undervalued in the stock split. Contact a good attorney and begin a lawsuit (avoid class-action) against Tesla for this bargain-sale buyout. Makes me wish I had bought SCTY stock for the opportunity to file on my own.
jaynos is saying that TSLA is unlikely to go much above $235, but Solar City had a lot of potential to move above $26.70. By converting them now, they've basically thrown away all the potential future movement.
The point is, that share prices are absolutely meaningless without the number of shares which just gives you market capitalization. Tesla could just do a 8:1 split and their per-share price would be $30/share -- Would that change their upside? Of course not.
Presumably jaynos meant those prices are relevant in relation to historical prices: Tesla is near all-time highs, while SolarCity's share price has been around $75 at one point.
I do agree with another poster that SolarCity was more likely to be heading towards $0, rather than back to $75.
Potential upside is considered by the market in current pricing.
You're completely right. TSLA investors are being used to save a company with uncertain future.
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.
You're only getting screwed if a higher offer isn't made by someone else.
Disclaimer: TSLA investor.
Reading the presentation, Musk seems to be saying, "Solar City is great and will be even better if I run it like I do Tesla". And a hand wavy, "we have the same customers."
This seems like an unusually sketchy move from him.
Feels like a "thanks cousin, but now it's time I run this company too" pseudo takeover thing. Personally I don't mind, as an investor in both SCTY and TSLA.
> "we have the same customers."
Well, I assume that means the Powerwall, in which case I agree, they do have a lot of the same customers.
I think there's a lot of potential to market Tesla cars/batteries to Solarcity customers, and Panels to Tesla car/battery owners. I wouldn't be surprised to see combo packages sold in the future.
He means the cars. When you buy a Tesla the first thing they do is send you marketing materials to get a Solar City install to charge your car at home, as they are an "approved vendor".
So a lot of people with the cars have Solar City installs on their roof.
Isn't Solar City run by his cousins?
And he owns a lot of its stock.
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.
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.
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.
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.
Yep, bigger facilities usually have bigger economies of scale.
The idea might be that you have your panels charge a battery by day, which feeds into your car by night. Use the same idea with "Tesla stations," with the price-per-mile barely more than the maintenance cost of the station - use a flywheel or maybe whatever the next wave of batteries is.
Only 14% of emissions come from transport (as per your reference) and, assuming an eventual complete transportation reform, that's still not enough. Master plan part (french N): shift/grow into the energy and industrial sectors. More announcements are coming, the only concern I have is that they come fast enough.
Ah, but one enhances the other. Solar (and wind) both suffer from the intermittency problem: both do not scale up or down to match demand peaks and troughs for electricity. Also the 'amount' of sun and wind varies geographically. So the two solutions are:
- Build roughly 6 sets of geographically distributed wind/solar farms (with 6 separate sets of transmission infrastructure) to handle base-load demand reliably. Expensive.
- Attach a whole bunch of batteries to the grid to smooth out demand. Also (currently) expensive.
I think Elon Musk's solution is to convince enough people to buy huge battery packs that they occasionally drive around, but mostly leave plugged in to the grid.
> I think Elon Musk's solution is to convince enough people to buy huge battery packs that they occasionally drive around, but mostly leave plugged in to the grid.
Musk's plan is also to sell literal battery packs that attach to the wall, provide for expansion, and work in tandem. Which he is already doing.
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.
Thunderf00t has some good videos. But these are not his best work. The hyperloop issues are more engineering issues than solar roadway's physics issues.
This series kind of feels like thunderf00t pandering for views with controversy.
I've read praise of Thunderf00t on HN this weekend and today. Skimming his content, he comes across like a rather unpleasant person who produces polemical material. Am I missing something, why do people refer to him and his content in a positive manner?
He has good series and bad ones. If its about science, like his series on the coulomb explosion of sodium in water. Then it can be pretty good. Or military history, UK politics.
If its about social issues. Usually not very good, or insightful with a few exceptions.
Like most people making their primary income off youtube, he needs to grind out content a couple times a week. Not all of it is gold.
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...)
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.
He made a pretty good case on the first conference call that buying SolarCity out right is the best way to prevent future conflicts of interest. Partnerships between the two companies as independent entities would mean continuous scrutiny over which party would be receiving a favorable conflict of interest.
Is the Powerwall just was an optional accessory to upsell to Tesla automobile customers? If so, then the SolarCity deal is bad for both parties. I am inclined to believe not.
If the purpose of Tesla is to transition humans from fossil fuels to solar then it would appear that this makes sense from multiple points of view. Presumably Tesla can do a better job at doing this faster and quicker than SolarCity could on its own. This is a really, really big task and making some comparisons about how SolarCity may capture a greater amount of future profits by itself is underestimating the future competitive environment and likelihood of a positive outcome.
The thing for investors to look at critically going forward is how Tesla advances in manufacturing capability relative to the competition. The attempt at raw materials in, finished goods out, at a very high rate of speed, speaks strongly for how Tesla is trying to achieve their underlying mission.
Perhaps in 5 years many companies will be able to accomplish this. If so, further shareholder dilution is a big problem. Tesla could be wildly overvalued. Other car companies are producing good electric cars and they will be self-driving soon. Doing an ok job of those two things alone can't justify Tesla's value or survival. Uber's transportation network effects combined with the huge drop in auto sales from vehicle sharing will gut any plausible profits.
Value investors beware. Also a good exercise in why just doing traditional balance sheet & income statements combined with a linear evaluation of the business results in tech companies always looking way overvalued (Facebook being wildly overvalued since Mark Zuckerberg turned down the $1b offer from Yahoo.)
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.
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
Hyperloop is basically a napkin idea that happened to get a lot of people interested in it. I don't see what's shady about it, since he's not using it to raise money or anything. Official involvement has basically been the idea and some small competitions for proofs of concept.
I don't particularly see this as a bad thing, since they'll be able to add more Supercharger stations for the future.
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.
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.
Wasn't this basically expected/intended/inevitable? Considering Musk was one of the founders, along with his cousins that currently run it.
> 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?
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).
> 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.
You couldn't get those combo packages without a merger?
Not with all the same possibilities. If it's the same company, they can sell one product close to margin (or below), and make it up in other products that are sold in the same package. Installing solar panels at zero profit isn't all that useful for Solar City as a singular entity, but if it's part of a package that includes an Automobile and Powerwall setup, there's a lot more places to make that profit.
That's what I'm implying. Certainly didn't decrease the chances of this.
It won't be nepotism if the decision makes business sense I guess.
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.
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).
SCTY was trading around $22 when the merger was first announced back in June.
Looks like those who don't approve the deal and those who do both voted with their money.
If they don't approve it, they're short-sighted. The model makes a lot of sense in the long run.
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.
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.
I wonder if they combine these two with SpaceX - Elon Musk might well become the first trillionaire.
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.
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.
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.
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.
Once SpaceX have a big enough rocket the whole solar system will be Elon's bitch... Bring on the real space age!
exactly my thoughts
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?
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.
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.
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.
Can anyone explain to me why SolarCity's stock is going down right now? (-5,2% in the last 24h).
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.
They had to...remember the recently unveiled master plan?
Does Solar City have plans to go beyond the leasing model?
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...
They lost me on ".. achieve cost synergies .."
Short for saying combine HR, accounting, etc. but it's still always annoying to read.
Right, that's my take as well.
Why?
Because those typically do not get realized and yet will result in a sizable number of lay-offs.
Well, if you made layoffs, and both companies continue operating, haven't you saved money?
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.
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.
... to form Voltron.
Look, I could not help but make that stupid joke when it fits so well.
Elon taking delivery of a McLaren F1 in 1999 [0]. Quite prescient really.
What's prescient?