Tesla Motors Announces Plan to Acquire SolarCity for $2.8 Billion

It seems like Elon Musk’s companies are buying each other now, as Tesla Motors, Inc., Musk’s electric car company, announced their intention to buy solar power company SolarCity Corp for $2.8 billion this week.

Musk called the acquisition a “no-brainer,” but Tesla’s shares dropped as much as 10 percent on Wednesday following the announcement, according to Reuters.

“Tesla’s mission has always been tied to sustainability … Tesla customers can drive clean cars … but they still need access to use the most sustainable energy source that’s available: the sun,” Tesla Motors wrote in a press announcement.

It’s worth it to note that Elon Musk is the chairman and largest stockholder for SolarCity, according to The Wall Street Journal.

Tesla’s plan stems from a desire to become a one-stop-shop for clean energy vehicles. Customers would be able to buy an electric car, a home charger and battery pack, and a solar panel system to charge them, all in one place, according to Roadshow.

The deal would see SolarCity products being brought under the Tesla brand, which would create a company with nearly 30,000 employees, The Wall Street Journal said.

This acquisition is hot on the heels of the launch of Tesla Energy, a new branch of the car company — announced in March — that focuses on battery packs and power cells. It’s likely that SolarCity’s assets will be folded into Tesla Energy.

But the deal isn’t quite done yet. The boards of both companies need to conduct further investigation, after which the shareholders will put the decision to a vote. Musk said that he will remove himself from the decision process to remove any conflict of interest, according to CNET.

While Musk may have his mind made up, many financial analysts are casting doubt on the deal. Both companies are cash-flow negative, and market analysts suspect that the acquisition could potentially magnify both company’s losses, Reuters wrote.