Tesla Says SolarCity Could Provide $1B in Revenue Next Year

Tesla is making its case to shareholders that a combination with solar panel maker SolarCity Corp. would be financially as well as environmentally beneficial.

In documents released Tuesday, Tesla said SolarCity -- the largest home solar panel installer in the U.S. -- could add $1 billion in revenue to the combined company next year. That would be more than double the $400 million revenue SolarCity reported in 2015.

SolarCity also could add $500 million in cash to Tesla's coffers over three years. In the last 120 days, the company has raised around $1 billion to fund solar projects, Tesla said. Tesla currently has around $3 billion in cash.

Elon Musk, who is chairman of both companies and CEO of Tesla, announced in June a plan to combine them in an all-stock deal worth around $2.45 billion. Shareholders of both companies are expected to vote on the deal on Nov. 17.

"I'm pretty optimistic about where the vote's going," Musk told Wall Street analysts during a webcast Tuesday.

But the merger is controversial. Neither company has achieved sustained profitability. Tesla reported a $22 million profit in the third quarter, but it was the company's first profitable quarter since 2013. SolarCity reports third-quarter earnings next week, but it lost $250 million in the second quarter.

Analysts also have questioned whether the deal could delay Tesla's first mass-market vehicle, the $35,000 Model 3, which is due out at the end of next year. Some shareholders have even sued, claiming that the merger is an attempt by Musk to use one company to bail out another. Musk owns 26.5 percent of Tesla and 22 percent of SolarCity, which is run by his cousins.

Tesla Motors Inc. shares fell 3.5 percent to close at $190.79 Tuesday before the financial details were released. They fell 1.4 percent in after-hours trading. SolarCity shares fell...

Comments are closed.