This week’s biggest story was a late-breaking one: the Tesla and SolarCity merger, which, despite much armchair criticism, won shareholder approval handily. Tesla will pay $2.6 billion to acquire SolarCity, and the transaction should be complete in the coming days. Elon Musk, Tesla’s CEO and Chair of the Board of SolarCity, abstained from the vote, as did several other shareholders who were on both sides of the transaction, but 85% of the shareholders who participated voted to merge. In response, Musk tweeted “Thanks for believing.”
Of course, not everyone is a believer. CNBC quotes a CFRA analyst who thinks the deal is “dilutive to TSLA’s profitability, will detract from senior management attention, and contribute to increased capital market funding requirements” next year. Eric Wesoff writes in Greentech Media, “It remains to be seen whether the newly approved acquisition will be a distraction for Tesla or a bailout for SolarCity.”
SolarCity’s new solar roof, which Musk unveiled a few weeks ago and which was developed in partnership with Tesla, gives some clues to the direction the two companies will take together. So too does this week’s other Tesla announcement, which is that the company is dropping the price of the Powerpack 2 by 10%, coming after a 5% price cut in September. The company is also getting ready to roll out several utility-scale installations of its Powerpack systems, which may drop the price even more.
In a piece prior to the merger, the New York Times featured a Hawaiian utility-scale solar-plus-storage project developed by Tesla and SolarCity, calling it a “steel-and-glass example of what Elon Musk, the chief executive of Tesla, and his cousins, Lyndon and Peter Rive, founders of SolarCity, have in mind for the merger.” Merging the companies will allow for these utility-scale systems to be developed as a package.
As a carmaker, Tesla is still receiving accolades for its luxury vehicle while the company gears up production of the mass-market Model 3. The Drive this week reported the Model S won the “Most Loved Model” in America. The award, which was created by a brand-consulting firm, surveys car owners on “different aspects of the ownership experience, ranging from interior door handles to taillight design to performance.” Maybe the beloved door handles of Tesla’s Model S won’t translate directly into well-integrated solar-plus-storage systems, but the company does demonstrate an obsession with well-designed hardware matched only by the fanatical devotion of the company’s biggest fans. (Musk’s reaction to the award? A simple tweet: “Love you too!”)
Meanwhile, the press is trying to figure out what the presidency of Donald Trump will mean for advanced energy. Our view? Too soon to tell. But here are two stories worth noting: First, in Bloomberg Businessweek, Matthew Phillips writes, “Clean Power is Too Hot for Even Trump To Cool.” Phillips cites Fortune 100 companies like Walmart (an AEE member) and Microsoft (also an AEE member) making investments in advanced energy, both before and after the election. Phillips also quotes Thomas Emmons, a partner at Pegasus Capital Advisors, who said, “I think fears of a negative impact of Trump on renewable energy are really overblown.” Second, here is this story in Utility Dive: “How Wind and Solar Plan to Thrive During the Trump Presidency.” Reporter Herman Trabish points out that wind energy developers have projects scheduled out for the next four years, and quotes AEE member Sunnova’s CEO John Berger, saying, “Our industry will be fine.”
Keep track of all the latest policy and politics updates with AEE's weekly newsletter, available for free at the link below.