Just chiming in on the Solar City discussion. Lots of good points raised.
I think many (not all) of the concerns raised are what I would consider to be short-term or even "soon to be in the past" issues. If you are mad at SCTY management, concerned about how SCTY structured its PPAs or reported its finances, I don't think that will turn out to be relevant to Tesla Energy and Tesla Solar in the long term.
The CFO of Tesla Solar will be Jason Wheeler. The CEO and Chief Product Architect will be Elon Musk. The CTO will likely be JB Straubel. I think this will be like most mergers of unequals and many in existing management, especially at high levels, will find something else to do after a transitional period.
Pricing and sales models will be Tesla pricing and sales models. Jason Wheeler will be responsible for finances and financial reporting. The Chief Product Architect will be Elon.
I believe Elon is approaching this, as he does most things, from a long-term perspective in his role as Tesla's Chief Product Architect. Most of the discussion seems to be ignoring Elon's stated purpose for the merger, which is to create an integrated solar/battery product, with one point of sale, one installation, one service contract. From MP Part Deux:
Integrate Energy Generation and Storage
Create a smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world. One ordering experience, one installation, one service contact, one phone app.
We can't do this well if Tesla and SolarCity are different companies, which is why we need to combine and break down the barriers inherent to being separate companies. That they are separate at all, despite similar origins and pursuit of the same overarching goal of sustainable energy, is largely an accident of history. Now that Tesla is ready to scale Powerwall and SolarCity is ready to provide highly differentiated solar, the time has come to bring them together.
Now maybe some of you will argue that an integrated solar/battery product is a dumb idea. Well, it is now a core part of Tesla's long-term business strategy so if that's what you think you might want to consider that your investment objectives are not fully aligned with Tesla's business plan. I personally think many people are missing the genius of this strategy, and the competitive advantages it will bring to Tesla.
Others have said, well ok I see the point of an integrated solar product, but why Solar City? Why not just develop an in-house solution or buy panels from someone else. There are several answers to that. The most obvious are the desire to move quickly in a market that is expanding incredibly fast, and to seize the immediate opportunity of 500,000-1,000,000 customers who are just primed to buy solar (iModel 3,S,X and Y customers) about to start streaming into Tesla's showroom and stores.
Another factor is that SCTY is by far the leader in residential installs in one of Tesla's key markets -- the U.S. If Tesla does not buy them, they will be competing with them head-to-head. Bringing a potential future competitor in-house makes much more sense than starting from scratch as a small player IMO. And, incidentally, I don't hear many people talking about the capital that would be required for Tesla to build a solar business from scratch.
I think many here are missing a big piece of Tesla's strategy, which is the halo effect of Tesla being able to sell an integrated system, solar, battery and vehicle, that is a beautiful, modern, high performance system that dramatically reduces the GHG impact from a person's home and transportation. Tesla wants to do for the energy side of the business what it did for EVs -- make a solar/battery product that is desirable, high performance, cost effective. Not a product solely for the eco-conscious, but the practical, the sensible and those who like to show off a little to their neighbors.
In my opinion the most valid concern that has been raised is the concern that SCTY's debt will overwhelm Tesla and jeopardize the Model 3 launch. But I have seen no evidence that this is in fact a major risk, and I believe concerns about this have been overblown. Is there zero risk? No, of course not. But Tesla has had no difficulty going to the capital markets and the Solar City merger is not going to change that.
At the end of the day, Elon is not afraid to take risks. If he were, we would never have developed the Roadster, the Model S, the Model 3, the Gigafactory, Autopilot, Tesla Energy, Superchargers, and the list goes on. There are many people who can't stomach Elon's willingness to take risks to implement his long-term vision. There is nothing wrong with that. But they may want to consider trimming their exposure to TSLA stock, because that just comes with the territory. And IMO it is a core reason Tesla has been able to make huge strides where others failed or didn't even try, and a core reason why I am invested heavily in TSLA.
Finally, I was skeptical bordering on angry when Tesla first decided to pursue TE because I thought it was a major distraction from their mission. Same with Autopilot, which I thought was another huge distraction, and that Google was so far ahead they couldn't possibly catch up. I quickly came to the conclusion that my knee-jerk reactions were very badly mistaken. I am not saying that Elon is "always" right; he's not. But there is no single person whose opinion and judgment I trust about Tesla's future more than Elon's.
Bottom line: To me, it is not at all difficult to see the value of this merger. IMO, as someone once said "it's a no brainer."
And even if I had doubts, I would trust Elon's judgment.
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