Tesla to diversify offerings with SolarCity acquisition
OVERWHELMING SUPPORT: Deal approved by 85pc of unaffiliated shareholders
TESLA Motors Inc chief executive Elon Musk won approval on Thursday from the electric luxury carmaker’s shareholders for an acquisition of SolarCity Corp, the solar energy system installer in which he was the largest shareholder.
The stock swap deal, worth about US$2 billion (RM8.83 billion), caps a tumultuous year for both Musk and Tesla.
The proposed acquisition of SolarCity, a money-losing installer of residential solar power systems, prompted a 13 per cent fall in Tesla’s share price after Musk outlined the deal in June.
Tesla said the deal was “overwhelmingly” approved by 85 per cent of unaffiliated shareholders.
Shares rose 1.3 per cent in afterhours trade after gaining 2.6 per cent in the regular session to close at US$188.66.
Tesla investors have also been rattled by a federal investigation of the death of a Tesla owner operating his car on Autopilot, a driver assistance system, and by concerns Musk may be overextended between ambitious future goals for Tesla, the work of integrating SolarCity, and his chief executive officer duties at SpaceX.
The carmaker’s shares are down nearly 20 per cent for the year, and took a hit after Donald Trump’s victory in the presidential election.
A key Trump adviser on environmental issues, Myron Ebell, had said federal tax subsidies for electric vehicles should be cut off.
Tesla faces even more challenges in the months ahead, as the company tries to make a five-fold leap in its annual vehicle production and launch next year its new Model 3 sedan, aimed at massmarket customers able to buy a car with a starting price of US$35,000.
Musk received a boost for the SolarCity deal earlier this month when Institutional Shareholder Services recommended that investors in both firms approve the deal.
Meanwhile, Tesla, whose cars aren’t compatible with China’s charging standards, would introduce converters that allow owners to power their vehicles at state-run points.
The adapters would give owners more choice and reduce range anxiety by expanding the number of recharging points in China beyond its own network of superchargers, said Tom Zhu, Tesla’s China country manager.
“The converters would help our sales by reducing preliminary concerns in China,” said Zhu at the auto show in Guangzhou, China yesterday.
Tesla had said it would make its vehicle power jacks compatible with state-owned charging stations when the Chinese government announces a standardised system. Agencies