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Tesla Acquires SolarCity: Little Can Stand in Elon Musk's Way When He Wants Something (cnbc.com) 161

An anonymous reader shares a CNBC report: You have to hand it to Elon Musk. He didn't just sell the deal of his life last week when shareholders of Tesla and SolarCity agreed to a merger. He pulled off the deal amid widespread criticism from business ethics and corporate governance experts who slammed Musk from the moment the $2.6 billion deal was proposed. Any skepticism Musk deserves he created for himself, but that skepticism now needs to move from the deal to something else: Just what exactly have Tesla investors gotten themselves into? Some pundits point to the deal as part of Musk's master plan to create a car powered by solar and to develop batteries that radically change how we generate and store energy. Musk noted earlier this month that a solar roof for cars is "probably" going to be added as an option for Tesla buyers. But a good place to look at the lingering confusion as the combined electric-car and solar-power company moves forward is the reaction from stock analysts. Musk's vision is so bold that some on Wall Street remain unable to fully comprehend it or, in the least, grasp how it's a catalyst for Tesla shares in the short term. "Whatever the synergies are down the road, it's negative for current holders," said Efraim Levy, analyst at CFRA Research.
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Tesla Acquires SolarCity: Little Can Stand in Elon Musk's Way When He Wants Something

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  • Cold hard cash (or stock options).

    May Elon continue his company until the next stock crisis hits!

  • Here's a thought (Score:5, Insightful)

    by Nidi62 ( 1525137 ) on Monday November 21, 2016 @11:45AM (#53332309)

    Musk's vision is so bold that some on Wall Street remain unable to fully comprehend it or, in the least, grasp how it's a catalyst for Tesla shares in the short term. "Whatever the synergies are down the road, it's negative for current holders," said Efraim Levy, analyst at CFRA Research.

    Maybe Musk just doesn't give a shit about short term "investors" that jump around from stock to stock, but rather is more concerned with the long-term sustainability of his company? By owning solar panel production and having the ability to integrate the panels with the cars, it not only frees up reliance on external factors (the need for places to install charging stations for electric cars to remain viable, as well as reliance on many forms of energy) but also reduces the need for them to build out their own charging/battery swap infrastructure, which saves money. It should be obvious to anyone looking at SpaceX and Tesla that Musk is playing the long game.

    • by haruchai ( 17472 )

      Musk's vision is so bold that some on Wall Street remain unable to fully comprehend it or, in the least, grasp how it's a catalyst for Tesla shares in the short term. "Whatever the synergies are down the road, it's negative for current holders," said Efraim Levy, analyst at CFRA Research.

      Maybe Musk just doesn't give a shit about short term "investors" that jump around from stock to stock, but rather is more concerned with the long-term sustainability of his company? By owning solar panel production and having the ability to integrate the panels with the cars, it not only frees up reliance on external factors (the need for places to install charging stations for electric cars to remain viable, as well as reliance on many forms of energy) but also reduces the need for them to build out their own charging/battery swap infrastructure, which saves money. It should be obvious to anyone looking at SpaceX and Tesla that Musk is playing the long game.

      The long game still needs to pay off somewhat in the short term. The company has run up quite a bit of red ink and nothing they do is cheap.
      Another big downturn would bite them very, very hard and many of the people who reserved a Model 3 wouldn't be able to buy the cars.

      • The Model 3's are $35k cars.

        The average new car today is $33k.

        If people can't buy them, a LOT of companies are going to be in trouble.

        • by HBI ( 604924 ) on Monday November 21, 2016 @12:30PM (#53332635) Journal

          My wife and I have a combined income of $170k and have never individually bought a car that cost more than $15k. Primarily because it is a purchase of an object that depreciates faster than any other necessary purchase, so basic logic dictates you minimize the cost. Also, we've done the math on the cost of electric vs. gasoline and figured out that you'll never make back the price premium for a hybrid or an electric car during your ownership. Subsidies or no subsidies, the math is similarly bleak.

          The only reason car manufacturers are in business today is an overabundance of credit and stupid people who aren't putting two and two together about this. I say stupid because they are lowering their standard of living by buying huge SUVs or alternatively expensive hybrid or all-electric vehicles.

          • Congrats.

            But the fact remains that the average new car in the US today is over $33k.

            http://www.usatoday.com/story/... [usatoday.com]

          • Re: (Score:3, Interesting)

            by Anonymous Coward

            I think you must have made an error in your math. Assuming you are in the US, then I think you are probably not including the federal subsidy of $7500 for an electric car, plus many states have additional subsidies (yes, the state subsidy must be reported on your federal income tax the following year, so is not the full face value).

            For my personal situation, I have two Nissan Leaf's in my family and know each one cost slightly less than $14,000 out the door, thanks to these subsidies totaling $13,500 off w

            • by HBI ( 604924 )

              Oh, I probably should have mentioned that i'm 6'7" and 260. I'm not going to fit into a Leaf very well, but that doesn't apply to my wife. Your notes about battery life are something that I figured into the equation with an assumed life of 7 years, by which time I expect to be out of the vehicle, so it's a wash from my point of view. ICE repairs on the block and things related to it are noted, but expected to be beyond the expected life of the vehicle in my hands, so also a wash. Covered by warranties i

            • by vux984 ( 928602 )

              Now, if you want to make the argument that the electric cars are not worth it without the subsidy you might have a case,

              I think it goes without saying that the "smart money" doesn't buy new cars at all. My last car was $7500. I've paid about $1100 in maintenance (the bulk of that was in the first 2 weeks just catching some work that needed to be done). And at 10 cents a mile for gas its double to triple the cost of an EV... but I'm starting several thousand dollars ahead of your purchase price, and the car isn't really depreciating. I'll lose 1500k in depreciation over the next 3-4 years. You lost that driving it off the lot

              • Already in my state, they are imposing an extra tax for EV's to make up for the lost fuel tax revenue. That's fine. The roads need maintaining.

                • What state? I have still never seen an EV out in the wild and spent a couple days in Seattle recently. I'd expected to see them everywhere from reading the internet, but no such luck. I was even surprised to see as many SUVs as I did...and a lot of Mercedeses.
                  • Washington State of course. How could you not see EV's? They're everywhere. Leafs, Chevy Volts especially. And I have a little game I play. I count the number of Tesla's I see each day. It averages about 4-6 and it seems the number is increasing.

                    The state tacks on a $100 fee for registering an EV in addition to any other fees car owners pay to register their vehicle. This is to offset the loss of gas tax revenue and to pilot a transition away from fuel taxes as the primary finance device for road mainten

            • by G00F ( 241765 )

              I'm unaware of anyone getting 50% from government rebates, and even then its tax rebates(but I'm not seeing expired...).

              And that $7500 is a tax credit, most people with families and owning a home would take multiple years to see that back. That's a hidden cost of $500-$1000 depending on interest and number of years.

              You're also purchasing a cheap one with very limited range, up to 100 mile range, that will work as a commuter car, would have to be supplemented by use of another vehicle for anything more than

          • You should be thanking these people because without them there wouldn't be a glut of nice sub-15k cars to choose from :-)
          • by G00F ( 241765 )

            Stupid is a bit extreme, but does fit well with a large portion of them.

            But along the lines of what others are pointing out.
            1. They are what makes it possible for you to even buy used cards only a few years old.
            2. Standard of living includes the car.
            3. I will give the cost of the loan could be lowering their standard of living, especially those always in new cars....

            However, I am with you in buying the few years old, but hold on onto them longer than you. When I've been asked about getting an electric car,

          • "never individually bought a car that cost more than $15k" You must be buying used or just buying the absolute cheapest new cars on the market. Don't compare used cars to new cars. You're absolutely right about the depreciation. The smartest thing to do financially is buy a 3 year old car with low miles. It's nearly 50% cheaper, but still practically new.

            Now that that's out of the way, let's talk apples and apples. Looking forward to the Model 3, assuming a $35k MSRP, the 5 year TCO should be lower th

          • My wife and I have a combined income of $170k and have never individually bought a car that cost more than $15k. Primarily because it is a purchase of an object that depreciates faster than any other necessary purchase, so basic logic dictates you minimize the cost. Also, we've done the math on the cost of electric vs. gasoline and figured out that you'll never make back the price premium for a hybrid or an electric car during your ownership. Subsidies or no subsidies, the math is similarly bleak.

            The only reason car manufacturers are in business today is an overabundance of credit and stupid people who aren't putting two and two together about this. I say stupid because they are lowering their standard of living by buying huge SUVs or alternatively expensive hybrid or all-electric vehicles.

            It all depends on the math since not everything is a zero-sum game. I drive a beat up honda civic 1998. The muffler just fell of and I have in the trunk. I'm pretty much driving that shit until it dies, and probably I will just lease a cheap car since my work commute is relatively small.

            OTH, my wife and I pooled money together to get a Prius V, paid in cash. We went around multiple dealers, putting them on the phone against one another until we cut so much off the price tag, we made the dealer shave off 8

          • Also, we've done the math on the cost of electric vs. gasoline and figured out that you'll never make back the price premium for a hybrid or an electric car during your ownership

            I would like you to share that magic equation that literally eliminated the many many assumptions that go into determining which vehicle is cheaper to own in a specific scenario.

        • by ncc74656 ( 45571 ) *
          Where do you live and for what are you shopping that the average new car costs $33k? The midsize crossover I'm driving now was $27k four years ago, and I think the only options it doesn't have are AWD and leather (and it doesn't have those because we didn't want them). That's the most I've ever spent on a car, and my wife and I were making about $120k-ish between us at the time.
        • by haruchai ( 17472 )

          The Model 3's are $35k cars.

          The average new car today is $33k.

          If people can't buy them, a LOT of companies are going to be in trouble.

          Most of those other companies have lower-cost cars or CPOs below $35k; Tesla doesn't.
          Perhaps a lot of the early-stage reservation holders may opt to lease to ride out a downturn but many more will defer - or cancel and want their money back, which has already been spent.

    • by jxander ( 2605655 ) on Monday November 21, 2016 @11:51AM (#53332369)

      Maybe Musk just doesn't give a shit about short term "investors" that jump around from stock to stock, but rather is more concerned with the long-term sustainability of the planet?

      FTFY.

      • Slamming Musk has become more popular as some of his high-stakes gambles look as though they might pay off. He made a bunch of money from the PayPal sale, but a significant chunk of that went into TESLA. Had the TESLA stock-sale tanked Musk would have been, if not broke in the minimum wage sense, broke in the "he would need to take a job" sense.

        TESLA wasn't about money, it was about Elon Musk and determination to do the right thing. That is made money is a vindication of the theory that you should fol
    • EXACTLY. It's not about the short-term. ANYONE in their right mind should realize that his vision is larger than just in the next few months. Solar roofs, solar cars, etc. He's in it for the long-haul.
    • by Yvan256 ( 722131 )

      But with today's solar panel technology, even suggesting putting solar panels on a car is idiotic. One day's worth of charge in the middle of a non-cloudy summer day will let you drive what, one or two kilometres?

      • by skids ( 119237 )

        Mostly the panels go on the roof of the house. Which kinda requires storage if your car isn't at your house during daylight hours.

        I did the math on this once... if while parked, car roof panels folded out over the windshield (doubling as a blind) and the front hood, and
        the car was parked faced into the sun then there'd be enough collected to make a significant contribution to a commute, but if you wanted to
        do it entirely this way, you'd best have a very short commute. That's about the best case scenario.

      • It might pencil out. Electricity isn't free(yes, free public charging stations are the exception, but I doubt most owners use them for most of their charging), so if you park your car outside you're getting free electricity from the solar panels. Over the life of the car, the panels might pay for themselves, depending on how expensive it is to integrate them into the roof.

        The Model S is a luxury car, and luxury buyers tend pay a lot for features that aren't exactly practical. If buyers think integrated
      • I always thought the point was to have roof-top solar cells on the home or car-port to offset the electricity used to charge the Electric vehicle. Additionally used batteries that were a bit too soggy to used in a vehicle would still have plenty of capacity and charge-rate to serve as a store for excess power for a household to use in the evening and potentially for load-leveling the Grid.

    • The problem with integrating it into cars is that it isn't efficient enough. If you consider that most solar panel installations require that they be placed at the best angle to the sun and that cars are not going to be at the correct angle, likely to be under shade/snow/garage, and the surface area of the car is low compared to typical roof installations, the maximum power from integrated solar cells is extremely low.

      Even if you used solar paint and solar windows for maximum surface area, you won't be abl

    • Agreed about Musk's vision, but you pro-solar people have got to start learning the limitations of the technology. Covering a car in solar panels is mostly pointless. The Telsa S is about 2m wide by 4m long. If you figure half of that surface area (viewed from the top) is windows, that leaves 4 m^2 for solar panels.

      Assuming high-end 200 W/m^2 panels, that gives a peak generating capacity of 800 Watts. The capacity factor [wikipedia.org] for solar in the continental U.S. is about 0.145. That's the ratio of actual po
      • Honestly, I figured he was just lining up all the technology he needed for a future Mars base/colony.

        • SpaceX for the transport
        • Tesla for the vehicle development
        • Solar City for Habitat power

        Still needs more in terms of habitat design and environmental controls although that could be piggybacked into manned SpaceX programs.

      • Solar panels on the average house plus storage can be enough to power a house and your car. Couple that with Wind and other renewable energy sources you can charge your storage unit at night with clean power from the grid. Getting solar roofs on enough houses means more options and suddenly you have significant electrical capacity to create microgrids in neighborhoods and suddenly it becomes obvious that the century old practice of centralized energy production and transmission grids is expensive and obsol

      • by msevior ( 145103 )

        The point about solar city was to put solar panels on your house. You charge your powerwall during the day and fill up your Tesla 3 at night.
        Simple really.

    • Re:Here's a thought (Score:4, Informative)

      by MrKrillls ( 3858631 ) on Monday November 21, 2016 @01:47PM (#53333291)

      A different way to think about it is that many investors would be poorly advised to invest in Musk's projects, because he plays the long game, and those investors are looking at the short term for quick, certain payback. If they are checking the DOW every five minutes, and sweat the slightest dip, they may want to look elsewhere.

      Investors who can wait - really wait - and easily tolerate uncertainty should look at folks like Musk. Amazon, too, was misunderstood by Wall Street. Wall Street doesn't tend to get "long term".

      It is a matter of fitting one's investment to one's perspective.

  • I wonder what will happen when the feds end subsidies for solar panels and electric cars. I might start optioning Tesla stock, judging by what the new presidential administration will probably do.
    • Re: (Score:3, Informative)

      by Anonymous Coward

      Electric car subsidies are already limited to a specific number of cars per manufacturer (with some rounding to end of quarters, etc.) in the US. Tesla is confident they can make a car that will sell fine without the subsidy. (I personally don't think this is fair, since the oil industry is basically heavily subsidized directly, and also indirectly letting everybody else pay for the cost of pollution. A proper CO2 tax, that would actually cover that cost, would more than double the price of fossil fuels, ma

  • by Bruce Perens ( 3872 ) <bruce@perens.com> on Monday November 21, 2016 @11:52AM (#53332375) Homepage Journal

    Obviously, Elon Musk has a direction he's planned for the world, not just for Tesla, and he's going that way and damn the stockholders if they aren't interested in being there for the ride.

    This is all fine, but the corporate governmental structure that would fit it is to be a "B" corporation [bcorporation.net]. Then your stockholders know what they're signing on to and the courts don't get to hold you to producing profit without regard for the long-term viability of your company or the world around it.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Then your stockholders know what they're signing on to and the courts don't get to hold you to producing profit without regard for the long-term viability of your company or the world around it.

      What utter tripe. Don't want courts to hold you to "profit uber alles"? Don't declare that as your intent in your corporate charter.

      There IS NO LEGAL DUTY whatsoever for any corporation to "maximize shareholder value" or "increase profitability" or any other such thing. This "B Corporation" thing is a marketing gi

  • Except pesky physics, which still refuses to budge.

    • Re: (Score:3, Interesting)

      Regardless, 0 - 60 in 2.4 seconds ain't too shabby. Time to test the brakes...

    • Except pesky physics, which still refuses to budge.

      Hey, they are just laws, and we all know laws are for breaking......

  • by hey! ( 33014 ) on Monday November 21, 2016 @11:58AM (#53332429) Homepage Journal

    Well, OK. But stay away from white Persian cats. That'd be a little on-the-nose.

  • I worked for a moving company as a PC disconnect/reconnect technician. We moved Solar City to a different building in December 2010. I came across one table at the old location where someone practically raped the pine needles off a small Christmas tree. Very brutal. I felt sorry for the poor tree. That was my first and last time at Solar City.
    • Re: (Score:2, Offtopic)

      by elrous0 ( 869638 )

      I came across one table at the old location where someone practically raped the pine needles off a small Christmas tree.

      Probably one of those new "ecosexuals" [ucsc.edu]. And yes, that's apparently an actual thing now, and not just some joke about extremist eco-hippies. And no, they don't get nature's consent first, presumably.

      I swear, it's becoming harder and harder to parody the left when so many of their own have become parodies of themselves.

      • Re: (Score:2, Offtopic)

        I swear, it's becoming harder and harder to parody the left when so many of their own have become parodies of themselves.

        I very much doubt anyone will be able to top the Trump parodies for the next four years.

  • If the panels provide enough to cool the interior on a hot summer day, I'm happy!
    • Simple fact is that the weight of the solar panel is not worth it. As it is, Tesla just came out with an max and min temps for the cabin so that if somebody leaves a dog or kid in the car, they will not die due to heat. If this was to run continually while the car was parked, it would last some 6-9 months.
  • Huh? (Score:5, Informative)

    by MMC Monster ( 602931 ) on Monday November 21, 2016 @12:34PM (#53332667)

    Elon Musk most certainly wanted this to happen, but he actually recused himself from the actual vote, citing conflict of interest.

    That being said, good for him and other Tesla investors (I don't own any stock in any individual company, but I own mutual funds which own just about all stocks in the market) for looking a little bit at the long game rather than the next quarterly profit.

  • Minecraft.... (Score:5, Interesting)

    by spire3661 ( 1038968 ) on Monday November 21, 2016 @12:41PM (#53332731) Journal
    What pisses me off is that Minecraft was valued at 2 billion dollars and was sold to MS without anyone even thinking twice about it. But actual useful stuff that humanity needs? Lets fuck around and delay and wring our hands about it.
    • Re: (Score:2, Interesting)

      by Anonymous Coward

      The difference being that Minecraft actually makes a PROFIT. TSLA, not so much....

      • by barc0001 ( 173002 ) on Monday November 21, 2016 @03:05PM (#53333951)

        "We destroyed the planet sure, but for a brief beautiful moment there we were really creating value for the shareholders"

      • Way to make his point.

        And actually pull up Tesla's financial report before spouting that nonsense. I'll help. http://files.shareholder.com/d... [shareholder.com]

        See the lines "Revenues" and "Cost of Revenues", where the former is greater than the latter. That's profit. Something tells me game developers don't require billions of dollars in capital expenses for manufacturing facilities, service centers, etc. Geese, why do I bother. You're probably just trolling.

      • Tesla announces first quarterly profit in over three years

        http://nypost.com/2016/10/26/tesla-announces-first-quarterly-profit-in-over-three-years/

  • Transformation (Score:2, Informative)

    by Anonymous Coward

    Tesla is now building in Autopilot 2 into their vehicles and they provided a new demo video of the code that will eventually be enabled on the vehicles shipping today:
    https://www.tesla.com/videos/a... [tesla.com]

    The acquisition of Solarcity has to do with turning Tesla into an integrated transportation company including the energy and the vehicles. Tesla is uniquely positioned for the coming changes in transport, both at the individual vehicle level and in commercial trucking.

    The acquisition also has to do with the tra

  • Mullaney has been all over Musk declaring that he would fail at Tesla, Solar City, and SpaceX every 6 months or so
    The best way to figure out how Musk is doing is to check Mullaney's postings and as long as they continue to say, that he expects musk to fail, tell you that Musk is doing JUST FINE.

    And Totally understand why AC posted. Chances are high that it is Mullaney himself.
  • by Flicker ( 4495 )

    Linking articles from credulous, retweet "journalists" and energy/auto industry sock puppets? Nice to know Slashdot has no problem with fake news.

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