Tesla: SolarCity could provide $1 billion in revenue next year

Naysayers of the deal - whom Musk called out during a conference call with analysts, saying they had never accurately predicted Tesla's success - have said the merger is short on synergies and amounts to a Tesla bailout of money-losing SolarCity.

The PayPal co-founder said merging Tesla with SolarCity will create a seamless experience for customers looking to buy solar panels, home batteries and solar roofs. Tesla tried to defend SolarCity's financials and its debt issues, but the investors don't seem convinced.

Thomson ReutersTesla expects SolarCity to contribute over $1 billion in revenue in 2017 if the proposed merger is approved, Tesla wrote in a blog post Tuesday.

The electric-car maker headed by billionaire Elon Musk also said SolarCity would contribute more than $1 billion in revenue next year if the merger is approved by investors in a November 17 vote.

According to reports, this was mainly to discuss the Elon Musk's Tesla, SolarCity dealthat Telsa Inc. offered earlier this summer to purchase SolarCity Corp. for $2.6 billion. Neither company has achieved sustained profitability. Tesla announced its second profitable quarter ever on October 26, but critics said profitability was achieved through revenue from government-issued Zero Emissions Vehicle credits, and that the company delayed capital expenditures that will be eventually necessary. And if they have been uniformly....

The billionaire, who is chairman of both companies, said he would be surprised if the deal did not go through next month. "However, given our recent execution and our future production targets, there is no economic need to raise more capital now". In the last 120 days, the company has raised around $1 billion to fund solar projects, Tesla said.

Analysts and investors also have their eyes on another potential lifeline.

In its Tuesday post Tesla stressed that SolarCity's cash position is strong and that its debt position "is much different than how it is sometimes described".

Tesla faces shareholder lawsuits alleging board members breached their fiduciary duty in approving the deal.

But Musk has called the deal a "no brainer".

Tesla reported a profit of $111 million, or $0.71 on an adjusted per share basis, in the third-quarter.

If the deal goes through, San Mateo, California-based SolarCity will adopt Tesla's name and sell its solar panels alongside Tesla's power-storing batteries, which it has been marketing to homes and businesses since past year. "Powerpack 2 is also now matched with a new inverter, designed by Tesla and manufactured at the Gigafactory". The company has conventionally leased panels, but is now selling more panels to increase cash flow.

Over the last several weeks, Musk has been setting the scene for what the combined company could create and provide. Despite the effort to drum up optimism, Tesla shares continued to fall on Tuesday in after-hours trading.

Further broadening its reach beyond electric cars, Tesla Motors says it's going to sell solar roof tiles that are customizable and meant to look like a traditional roof.



Other news