New Wrinkle for Tesla-SolarCity Merger: Uncertain Subsidies

Speaking on the topic, Tesla CEO Musk said that excluding him and other affiliated shareholders, who had made a decision to refrain from the voting due to their vested interests in both the companies, the merger still got the approval of an overwhelming 85% of Tesla shareholders.

Musk who owns about 21% shares in Telsa and 22% shares in SolarCity and Antonio Gracias, who is one of the directors of both the companies had not attended the shareholders voting. A large part of these savings stem from the carmaker’s anticipation that its roofing, manufactured by Tesla’s new automotive and solar glass division, would be lighter and easier to ship, thus reducing costs on breakage and transportation. The tiles are expected to be available next summer, and Musk said the solar roof may turn out to be cheaper to install and maintain than a traditional one.

According to Musk, these modern roof tiles may end up costing less than a traditional roof, but it will look better, last longer and generate electricity. The automobile company says that it expects SolarCity to add over half a billion dollars in cash to Tesla’s balance sheet within the next 3 years.

Tesla’s investment in solar energy goes beyond the new panel design.

Tesla is also gearing up to launch its Model 3, which is the firm’s first mainstream electric vehicle. Other companies like SunTegra and Solarmass have integrated products as well, and there is also a sizable list of failures, such as SunEdison’s Ready Solar and PV shingle offerings from Dow Chemical. Whatever the case, if Elon Musk’s claims are true, the Tesla Solar Roof tiles could very much change how people look at solar energy. In theory, Tesla’s batteries plus SolarCity’s solar panels could be a good match, despite the incestuous nature of the deal. Shares were up 1.3 per cent in after-hours trade after gaining 2.6 per cent in the regular session to close at $188.66.

Analysts surveyed by FactSet estimate that SolarCity is on track to report $711 million in revenue in 2016.

But Musk launched a public push advocating for the merger, and smoothed the way when he surprised Wall Street this quarter by reporting .0 million in profits for Tesla.