ELon Musk very confident on the merger of Tesla Motors and SolarCity

Tesla Motors founder Elon Musk is “pretty optimistic” shareholders will approve a $2.6bn (£2.1bn) deal to buy solar panel company SolarCity.

Here are some of the biggest takeaways from the update.

Tesla stock has been falling since the company announced its new solar roof and Powerwall last Friday.

The innovative car-maker released further details about the acquisition on Tuesday, including assurances over SolarCity’s finances, which have been questioned by critics. They’re meant to power a home when integrated with Tesla’s Powerwall, energy storage units for homes that are mounted on the wall or kept on the ground.

“Over time, I think most customers are going to opt for all three”, Musk told analysts.

The announcement was directly about a new joint product: solar roof tiles created to incorporate energy generation into the roof itself as opposed to later installing unsightly aftermarket panels. He said the future he wants consists of the solar roof, energy storage and electric cars.

Tesla store. Image source: The Motley Fool.

Speaking on cutting costs, Tesla also projected $150 million cost in savings within the first year from sales and marketing increased efficiency and high customer increase.

Although it is a compelling vision to accelerate the world’s adoption of sustainable energy solutions and provide them under one roof, the economics of the solar business does not generate confidence. Musk even said that the early response is “overwhelmingly in favor” of the merger.

For example, SolarCity CTO Peter Rive said that Silevo had perfected what’s called a “heterojunction cell” (basically multiple layers of semiconductors) using a 6-inch wafer, while Panasonic hasn’t yet transitioned to using a 6-inch wafer for solar cells.

Tesla’s offer, which represents about half of SolarCity’s value a year ago, values SolarCity at $25.37 a share.

Another move toward the ideal of being an energy company came as Tesla and Solarcity announced a prospective merger in August, with a vote by shareholders from both companies set to occur on November 17. The proposal is scheduled to go before both companies’ shareholders, but was met with skepticism by some analysts. “Powerpack 2 is also now matched with a new inverter, designed by Tesla and manufactured at the Gigafactory”. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.