Shareholders have approved Tesla’s [NSDQ:TSLA] acquisition of solar installation company SolarCity, a deal that’s expected to be completed within days.
Shareholders of both firms voted overwhelmingly in favor of the deal, with more than 85 percent of Tesla’s shareholders giving the green light. Unsurprisingly, the share price of both firms rose slightly following the announcement of the vote.
The deal, first announced in June, has raised numerous questions, especially since Tesla CEO and Chairman Elon Musk is not only Chairman of SolarCity, but also its biggest investor and a cousin of its CEO and co-founder Lyndon Rive.
In addition, SolarCity, like Tesla, has been bleeding cash, though Musk said a change in its business model should turn things around quickly. SolarCity currently leases its solar panels to customers but will move more to selling the panels outright. This is expected to boost revenue to $1 billion in 2017, up from $400 million in 2015.
SolarCity has also unveiled a promising product in the form of solar panel roof tiles, which Musk claims are comparable in cost to traditional roof tiles but more durable. Of course, they also have the benefit of providing free electricity.
Tesla’s goal is to become the “world’s only vertically integrated energy company offering end-to-end clean energy products to our customers.” In a nutshell, the company wants to offer electricity generation via solar panels, storage via batteries and usage via cars.
But traditional electric utilities shouldn’t worry just yet. Musk said that as most cars switch to electric power, electricity production will need to increase to a point where about one third comes from solar panels and the remaining two thirds from traditional utilities.