September 22, 2016 | By RGR Marketing Blog

Automotive + Solar? Musk’s New Merger

If you follow the latest news in the solar industry, then you’re undoubtedly aware of Elon Musk’s plan to bring SolarCity and automaker Tesla together under the umbrella of one company.

Musk first announced his intention to merge the two companies in his recently released his Master Plan, Part Deux. But why merge two seemingly disparate businesses under one roof?

What Does Musk Have to Say About the Merger?

According to Musk, the merger will offer substantial cost efficiencies for both businesses. On SolarCity’s end, the increased name recognition should drive down the cost of customer acquisition, which currently accounts 30% of the overall cost of installing a residential solar array.

The merger will also create the world’s only vertically integrated sustainable energy company. For customers interested in sustainable energy, a comprehensive package that includes solar panels, battery storage, and a stylish electric car could be quite compelling, especially if it had a unified aesthetic and seamless integration (which reminds us of a certain other tech firm).

Musk also says the strategic combination would accelerate the transition to sustainable energy and drive product development and innovation.

Tesla Critics Aren’t So Sure

Elon Musk and those who believe in his vision are excited about the merger, but Wall Street isn’t so sure about the financial implications. Some have criticized the move as a distraction for Tesla, just as the company is making a crucial transition into the mid-market auto sector. They also see it as a bailout for SolarCity, whose flagging growth prospects have hinted at an uncertain future for the #1 solar installer.

As of this writing, the only thing that could derail this potential post-carbon juggernaut is the shareholder vote. Assuming that goes through, and it likely will, the merger would likely reach completion by the end of Q4.

What Will the SolarCity / Tesla Motors Merger Mean for You?

So what might the merger of SolarCity and Tesla mean for the average solar consumer or solar business owner?

Well, it’s safe to assume that the newly joined company will make ordering an all-in-one sustainability solution a relatively simple matter. It’s also likely that such a single-source system would improve user-friendliness, offering a single mobile app to manage solar array, battery backup, and auto parameters.

The seamless integration might also improve efficiency, reducing energy loss between components and providing better overall performance for all three.

Given the fact that post-merger Tesla plans to manufacture its own panels in the near future, the average solar consumer could see the cost of installing a solar array plummet even further – not just through Tesla, but from its competitors as well.

What about the solar industry as a whole? Well, Musk’s ventures tend to generate headlines, and this one is no exception. Those headlines get more people thinking about solar, which is a good thing for the industry at large.

Solar Can’t Be Stopped

If the skeptics are correct and this merger ends up being disastrous, it may cast a brief shadow on solar energy’s bright future, but it’s unlikely that it would pose a serious threat to solar’s future.

After all, we’re talking about the sun. You can’t cast a shadow on the sun.

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