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Tesla Touts Cash Gain in Merger with SolarCity
Tesla Motors Inc. claims its proposed $2.6 billion acquisition of home solar panel producer SolarCity Corp. will contribute more than $1 billion in revenue to the carmaker next year and $500 million in cash over the next three years.
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Tesla Motors Inc. claims its proposed $2.6 billion acquisition of home solar panel producer SolarCity Corp. will contribute more than $1 billion in revenue to the carmaker next year and $500 million in cash over the next three years.
Tesla CEO Elon Musk, who owns 26% of Tesla and 22.5% of SolarCity and chairs both companies, is pushing hard for the all-stock deal. Shareholders are being asked to accept the proposed merger on Nov. 17.
Last week Musk described how combining SolarCity’s experimental solar roof tiles with Tesla’s electric cars and battery-based home energy storage devices could lead to “sustainable” car ownership. He says integrating such capabilities could enable solar solutions to capture a greater share of America’s $400 billion in retail electricity sales “than anyone currently expects.”
Skeptics question the economics of the merger, noting that Tesla and SolarCity have been chronic money-losers. Last week Tesla reported its first quarterly profit in three years. And Musk insists that a new marketing shift for SolarCity from leasing to cash sales will quickly resolve the company’s current $200 million-per-quarter cash burn.
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