Tesla defends plan to acquire renewable energy firm SolarCity
Tesla on Tuesday defended its controversial plan to acquire renewable energy company SolarCity, painting it as a financially smart move toward a more environmentally friendly future.
Combining the two companies would have "significant financial benefits," adding more than a half-billion dollars in cash to Tesla's balance sheet in the three years ahead, the US company said.
Tesla forecast that SolarCity would contribute a billion dollars in revenue to the combined company next year alone.
Tesla revealed in September that four lawsuits have been lodged seeking to block its merger with troubled solar panel installer SolarCity.
Two of the suits filed in Delaware court were backed by individual shareholders and the other two by pension funds representing public employees in Riviera Beach, California and in Arkansas.
The litigation "could result in an injunction preventing the completion of the merger or a judgment resulting in the payment of damages," Tesla said at the time.
In June, Tesla Motors and SolarCity Corporation proposed a merger that Tesla says will expand the attractiveness of its car sales by - together with a large battery factory it is building - creating a solution for car owners wanting a home solar system that supports both their car and household energy needs.
"The acquisition of SolarCity will create the world’s only integrated sustainable energy company, from energy generation to storage to transportation," Tesla said on Tuesday in a release.
"Energy needs to be sustainably generated, sustainable energy needs to be stored for later use, and sustainable energy needs to be used for transportation."
But critics say the merger is in effect a bailout of a debt-laden solar panel installer whose chairman, Elon Musk, is also the founder and main shareholder of Tesla.
Boards of both companies have agreed to the merger and are planning a general shareholders meeting on November 17 to vote on the acquisition deal valued at $2.6 billion.
Musk, who holds 21.1% of Tesla and 22.5% of SolarCity, will not be able to vote as a shareholder on the deal.
If the merger proposal is voted down, it would be a major setback for Musk's vision of reducing climate changing emissions with a company that not only sells people electric cars but is involved in generation and storage of solar energy that powers them.
Tesla last week unveiled solar roofs for environmentally friendly homes.
"We need to make them as appealing as electric cars have become," Musk said of solar panels during the announcement.
He also introduced an updated version of Tesla's Powerwall, a compact, solar powered battery that can provide the energy to a home or business.