Tesla, SpaceX, SolarCity, and the Cancer of Cronyism (Plus Post-Election Humor)

The vision is appealing, but in the short run it looks challenging. Tesla may have surprised investors by turning a narrow — and rare — profit in the third quarter, but the vast bulk of its current $28 billion market capitalization is predicated on Mr. Musk’s turning the company from a niche supplier into a truly mass manufacturer of electric vehicles. Tesla’s shares have fallen about 16 percent since the company unveiled its SolarCity bid in June, reducing the value of the all-stock deal to around $2 billion.

Hitting a self-imposed target of cranking out 500,000 cars per year by 2018, from a current run rate of around 100,000, already looked daunting. Tesla, after all, has a history of missing production and sales targets; its Model X S.U.V., for example, was delayed by problems with its falcon-wing doors.

Now Mr. Musk and his team also have a major acquisition to worry about. Throw in his continued role as chief executive of the rocket venture SpaceX, and he has a lot up in the air. Moreover, to deliver on its promises, Tesla will probably need to ask investors for fresh capital at some point next year.

For most chief executives, all this would make 2017 a make-or-break year. But Tesla investors’ overwhelming support of the SolarCity deal suggests that Mr. Musk is in a different category. Even if the wheels start to come off, he will probably be able to persuade the faithful to keep him in place and to hand over more cash. That may make Mr. Musk’s all-electric vision a self-fulfilling prophecy, no matter the cost.

Read More

Read more "Tesla, SpaceX, SolarCity, and the Cancer of Cronyism (Plus Post-Election Humor)"

Donald Trump and Subsidies: New Wrinkle for Elon Musk’s Tesla-SolarCity Plans

Analysts expect the company to post another net loss for this year. The company posted a third-quarter net loss of $225 million, 4% less from a year earlier and less than analysts had expected. However, it also cut its forecast for the volume of panels it expects to install this year to the equivalent of 900 megawatts from 1,250 megawatts earlier this year.

Shareholders will decide the merger’s outcome in a meeting at 1 p.m. Pacific Time or 4 p.m. Eastern on Thursday in Fremont, Calif.

Cowen & Co.’s Mr. Osborne expects Tesla and SolarCity shareholders to approve the deal.

Two shareholder proxy services have differing opinions about the proposed merger. Institutional Shareholder Services Inc. endorsed it earlier this month, saying it was needed to create an integrated sustainable energy company. But rival firm Glass Lewis & Co., urged shareholders to vote no, calling it a “thinly veiled bailout” for SolarCity. Mr. Musk is the chairman and largest shareholder of both companies.

Shares of Tesla closed Wednesday at $183.93, off 23% this year. SolarCity shares closed at $19.83, down 61% this year.

Read More

Read more "Donald Trump and Subsidies: New Wrinkle for Elon Musk’s Tesla-SolarCity Plans"

Elon Musk Faces Epic Juggling Act After Tesla-SolarCity Deal

The vision is appealing, but in the short run it looks challenging. Tesla may have surprised investors by turning a narrow — and rare — profit in the third quarter, but the vast bulk of its current $28 billion market capitalization is predicated on Mr. Musk’s turning the company from a niche supplier into a truly mass manufacturer of electric vehicles. Tesla’s shares have fallen about 16 percent since the company unveiled its SolarCity bid in June, reducing the value of the all-stock deal to around $2 billion.

Hitting a self-imposed target of cranking out 500,000 cars per year by 2018, from a current run rate of around 100,000, already looked daunting. Tesla, after all, has a history of missing production and sales targets; its Model X S.U.V., for example, was delayed by problems with its falcon-wing doors.

Now Mr. Musk and his team also have a major acquisition to worry about. Throw in his continued role as chief executive of the rocket venture SpaceX, and he has a lot up in the air. Moreover, to deliver on its promises, Tesla will probably need to ask investors for fresh capital at some point next year.

For most chief executives, all this would make 2017 a make-or-break year. But Tesla investors’ overwhelming support of the SolarCity deal suggests that Mr. Musk is in a different category. Even if the wheels start to come off, he will probably be able to persuade the faithful to keep him in place and to hand over more cash. That may make Mr. Musk’s all-electric vision a self-fulfilling prophecy, no matter the cost.

Read More

Read more "Elon Musk Faces Epic Juggling Act After Tesla-SolarCity Deal"

It’s Time to Stop Spending Taxpayer Dollars on Elon Musk and Cronyism

From Enron to Bernie Madoff, at the end of every great American financial scandal, the totality of the perpetrators’ greed seems to be matched only by the public’s incredulity at how such a thing could be allowed to happen.

And thanks to Elon Musk, there’s a good chance we may all be asking this question again soon.

The Senate Finance Committee and the House Ways and Means Committee have launched a probe into tax incentives paid to solar companies, according to The Wall Street Journal. The committee probes, led by their respective Republican chairmen, Rep. Kevin Brady of Texas and Sen. Orrin Hatch of Utah, have found an appropriate and disturbing target to begin this work.

SolarCity, a solar installation company set to be purchased by Tesla Motors Inc., is one of the seven companies named in the initial investigation.

Read More

Read more "It’s Time to Stop Spending Taxpayer Dollars on Elon Musk and Cronyism"

Tesla is officially in the solar roof business, says Elon Musk

It’s final: With no more barriers to the deal, Tesla is buying SolarCity. Tesla shareholders backed the acquisition, with an overwhelming 85 percent giving their approval, Tesla announced on the company’s blog. CEO Elon Musk and other ‘affiliated’ shareholders did not vote.

Tesla General Counsel Todd Maron announced the approval shortly after a special shareholders meeting, held for the purpose of voting on the merger, began, according to Electrek. SolarCity’s operations and staff will merge with Tesla and the SolarCity brand will become “Tesla Energy.”

“We would like to thank our shareholders for continuing to support our vision for the future. We look forward to showing the world what Tesla and SolarCity can achieve together,” Tesla wrote on the company blog.

The acquisition will cost Tesla approximately $2 billion. Once the SEC filing is complete Tesla will publish the final results of the vote, describing the affirmative votes as “overwhelming” and “more than 85 percent of shares.”

Read more:

Read more "Tesla is officially in the solar roof business, says Elon Musk"

SolarCity Could Give Tesla Too Much Sun

Election season isn’t over quite yet.

The outcome of Tesla Motors’ proposed acquisition of SolarCity will be known next week. SolarCity’s third-quarter results, and the way the company flattered the numbers, shouldn’t reassure Tesla stockholders that the deal is a wise one.

The solar-roofing company reported a net loss of $225 million on sales of $200 million. SolarCity has reported a loss on an adjusted basis in every quarter since 2013, according to FactSet. SolarCity’s cost per installed watt increased from a year ago, while the value per watt accruing to the company has dropped. Meanwhile, SolarCity cut its guidance for total panel installations for the third time this year.

Read More

Read more "SolarCity Could Give Tesla Too Much Sun"

The Fate of the Tesla Motors, Inc.-SolarCity Deal to Be Decided Thursday

Tesla’s shareholder meeting to consider the acquisition of SolarCity will take place in Fremont, California on Thursday, at 1:00 p.m. PST. For investors who won’t be at Tesla’s shareholder meeting, the company will also webcast the meeting live at tesla.com/shareholdermeeting.

SolarCity will be hosting its shareholder meeting to discuss the merger in Foster City, California, two hours before Tesla’s meeting.

Tesla has ambitious plans for its SolarCity acquisition, essentially planning to be the world’s first integrated sustainable-energy company, from energy generation to energy storage to transportation solutions. Today, Tesla is already the world leader for electric-car production when measured by kilowatt-hour battery capacity delivered.

Further, Tesla entered the energy-storage market with its Powerwall and Powerpack in 2015. And by the end of this year, Tesla will likely have already finished deploying the two-largest lithium-ion battery-storage installations in the world. Including projects being deployed now, Tesla has deployed 300 megawatt-hours of Tesla batteries in 18 countries.

With SolarCity, Tesla plans to also bring to market a solar roof, which the two companies jointly unveiled in October. The solar roof differs from traditional solar panels in that solar cells are actually the roof itself. With Tesla’s solar roof, solar tiles are integrated into the roof and are nearly indistinguishable from high-end roofing options.

Read More

Read more "The Fate of the Tesla Motors, Inc.-SolarCity Deal to Be Decided Thursday"