It makes no sense? Elon's vision from day 1 has always been about sustainable energy creation (solar and battery) and consumption (EV). He stated this from like 10 years ago.1. These are 2 completely different and unrelated businesses. Yes, the solar part is common ...but one is Panels on a rooftop and the other is Batteries ! The home and the car are 2 different animals, Not everybody owns both. In the US or globally. OH, and yeah TSLA is global, SCTY is NOT !!!! One is a technology brand and other is more like a service. One is personal and other is a utility.
2. Financially, there are zero synergies in product development, manufacturing or assembly or delivery costs.
3. Elon Musk is now forcing all current owners of SCTY and all current owners of TSLA to become owners and investors of both. The subset of such an owner pool is quite small and will get smaller.
4. The execution risks for the new combined TSLA investor are now doubled. BOTH entities have to do well on product, production, marketing and finance, IF they both don't then the combined entity will be hicupping for a long time.
Why and how in the world did the Board of TSLA agree to this ?
I am betting that this deal will NOT close ! And, Elon will look terrible and will have lost a lot of investor credibility.
I can't see the majority of TSLA car owners seeing this hodge podge of a new entity making execution risk of initial and long term quality in TSLA cars' process and production quality better.
Who exactly wins here ? SCTY owners who had no exit ?
Also, I highly recommend you guys listen to Elon's conference call on this merger. Very insightful. This deal will help both Tesla and SolarCity do better in the future, not worse.
This is part 1 of 7.
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