Musk: No Merger Between Tesla, SpaceX

SpacX Founder Elon Musk
SpacX Founder Elon Musk

Elon Musk has knocked down speculation that he will eventually merge SpaceX, Tesla and SolarCity into one large company.

“There’s not a strong rationale to combine SpaceX and Tesla,” Musk said, unlike his previous merger — apparently, “there is (rationale) for Tesla and SolarCity” to combine….

“(The relationship) is really quite tenuous for SpaceX and Tesla,” Musk said. “it’s not enough to merge into one entity.”

SolarCity has accepted an offer from Tesla to acquire it for $2.6 billion. The energy company makes batteries for Tesla’s electric automobiles.

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  • Skylander K2

    TELSA :/

  • John_The_Duke_Wayne

    What? are you saying SolarCity doesn’t need batteries?

    Given some of the recent push to change tax incentives for people installing solar panels on their houses and recent changes to buy back amounts from the utility companies it has encouraged SolarCity to look into battery technology installed in the house to provide power through the night.

  • mlc449

    SolarCity has accepted an offer from Tesla to acquire it for $2.6 billion.

    I know that SolarCity has other investors but the above quote still sounds odd. Basically Musk offering himself an offer.

  • Paul_Scutts

    Well I guess we can rule out Musk thinking about setting a new land speed record (at least here upon Earth). 🙂

  • Hug Doug

    Technically not. Elon Musk is the CEO of Tesla, however he is not the CEO of Solar City, but the Chairman. He owns the most stock in Tesla but not a majority, only about 27%, similarly for Solar City he owns only about 22% of the shares.

  • duheagle

    I think he’s saying that Solar City doesn’t make batteries. He’s correct. Tesla makes its own batteries, including the PowerWall line of home and industrial backup batteries. Solar City resells them as an optional part of its photovoltaic solar power installations. I think Tesla uses Solar City photovoltaic panels, as well as its own batteries, in its network of free charging stations.

    Musk is correct that Tesla and Solar City are, therefore, an increasingly close “fit” and that a merger makes sense.

    He’s also right that rolling SpaceX into the mix makes no sense for reasons he’s quite adequately explained ad infinitum any number of times over the last few years.

  • JamesG

    Yeah, there are lots of other stakeholder of both organizations that needed to okay the deal, not all of them wearing multiple hats like Musk.

  • Steve Ksiazek

    I don’t think Solar City actually “makes” anything. They just install equipment from other suppliers. Getting bought out by Tesla might actually raise their costs, since solar panels from China are cheaper than anything made in the US.

  • mlc449

    I know that SolarCity has other investors ….

  • duheagle

    Actually, Solar City does have a panel fabrication plant and intends to build more. The plant came along with Solar City’s acquisition of a panel company called Silevo two years ago. Silevo developed a low-cost process for making panels with 24% conversion efficiency. In essence, Solar City bought a superior cookie recipe and got the bakery along with it.

    Elon has said publicly many times that making solar panels is barely more difficult than making drywall. Solar City’s main costs aren’t the panels but the installation labor. Using Silevo panels, Solar City only has to install 3/4 as many panels to do a typical residential system compared to panels it used to use.

  • windbourne

    Even better would be for coastal areas that are hit by hurricanes to install solar city with bAttrries. This is superior to using generators.

  • windbourne

    Solar city has a plant going into western new York that will produce the lowest cost panel in the world.
    In addition, because of the Tesla car invertors, they are getting ready to make integrated battery packs that have the inverter.
    And, it will have ability to put a couple of circuits on battery when the grid goes down.

  • windbourne

    Silevo developed the process, but did not have panel production at the time. Later this year, production starts.

  • John_The_Duke_Wayne

    That’s and interesting use for these. My concern there would be 1) how long does the artery pack last, 2) if the panels are damaged how many of them can you loose before the the recharge capability diminishes to low to keep a useful charge on the pack for overnight, 3) how long is the average response time for hurricane damage that requires generator back up and 4) how does 1, 2 & 3 compare to something like a propane back up generator.

  • windbourne

    His family and friends own majority of both Tesla and solar city.

  • Hug Doug

    No they don’t. As far as I can tell, each of his cousins only own about 2% of Solar City stocks.

  • windbourne

    sigh.
    SC, Tesla and SX have LOADS of investment by musk family and friends.
    In particular, ppl like peter thiel quietly owns a LOT (possibly more than does elon).
    But, elon has mother, sister, brother, multiple cousins that own a lot of these companies. And every last one of the original guys from PayPal have invested into these.
    So, no, you are just touching the small things.

  • windbourne

    there is ZERO chance of a tesla/spacex merger. ZERO.
    About the only thing that will every happen is that Tesla might go private and Spacex buys it then.
    Musk hates the fact that investors have so much say.
    If it was not for the institutions that have bought into tesla/SC, then these companies would be much further ahead (also, much deeper debt).

  • windbourne

    1) The battery’s life is a factor of size vs draw.
    In general, you can assume that you might have 1 circuit for fridges/sump-pump, another for HVAC, and maybe 1 for lights.

    2) SC’s panels and mounting are rated for a minimum of 120 mph winds. If your panels are pulled off, then you do not have to worry. Instead, your insurance has to worry about the above ground pool that you now have.

    3) my folks live in jupiter area. they have security 24×7 to keep away looters. Other places will wait 1-3 weeks before security comes along. And in most of the south, electric lines are above ground on poles and they are torn out.

    4) lets say that you buy a generac generator. That is 3000-5000 depending on watts. these can start upon losing the grid, but most will be out within a day. IOW, you have to keep fueling them. Daily. So For it to run any length of time, you must be there.

    With the solar, it is automatically rigged to go. And assuming that it remained (again, if not, you have bigger issues to deal), then it will be taking care of your house QUIETLY and without re-fueling.

  • John_The_Duke_Wayne

    I’m a little worried about debris and the panels getting smashed but Florida requires home owners to have wind shields to cover their windows during hurricanes so it wouldn’t be much of a stretch to have a debris cover that you roll over them to protect them.

    I also know some people (elderly that need medical equipment to have constant power) who installed a back up natural gas generator, undergoing tank and weather proof shed around the generator that kicks on and can keep the house running for 5 days before running out of natural gas and it is constantly supplied by energy company through buried lines.

    I imagine that of the panels are destroyed there’s a good chance the house is in a similar condition so maybe the point is moot by then

  • Hug Doug

    I’m aware. Can you show they are a majority stock owners?

  • windbourne

    That is what I was told by one of the “friends/owners”.

    However, you ARE correct. The family does not own majority, so technically, yeah. It would be possible for this to not go through.

    But, very little chance because of what they are developing.
    You will see more before end of sept.
    In fact, I am holding off adding more panels because I want the new changes.

  • windbourne

    Solar City is at this very moment on top of my house pulling panels. The reason is that we got hit by hail that was golf ball to base ball size. It destroyed the hail-resistance shingles that we were exposed. Likewise, a number of windows were either cracked or leaked.
    Not a thing wrong with the panels. They are GREAT.

    Most of the deep south, esp. Florida has no nat gas pipelines. All they have is propane and that is rare.
    So, you can spend 10s of 1000 on that, or you can simply go with solar and have it provide you with cheap electricity with battery back-up for nighttimes/emergencies.

  • windbourne

    the facility CA is tiny. It was just for doing R&D, not really production.
    Yes, they mount some of the panels outside, but those are again, R&D and they are about making sure that the process WORKS.

    This is what they consider to be production:
    http://www.curbed.com/2016/4/1/11346692/solar-energy-gigafactory-buffalo
    https://www.technologyreview.com/s/600770/10-breakthrough-technologies-2016-solarcitys-gigafactory/

    They will supposedly build some more plants around America. Hopefully, they start them up next year.
    It would be useful for them to use these to get the GOP states to allow Tesla vehicles to sell there.

  • windbourne

    BTW, labor with mounting WAS a HUGE part (probably more than 80%), while the panels were small (20%)
    NOW, it is about 60/40. And that is in spite of the panel costs coming way down.

    I have to say that i am impressed. I have the original panels and equipment on the roof and 3 guys have pulled down 43 panels in 3 hours. I was talking to them and they were telling me the current version of hardware would allow them to have brought it down in about 2/3 of the time, i.e. 2 hours.

    And when I was suggesting that they do parking lots with automation, they told me that they could do a walmart parking lot in 1 day with 19 guys.
    That is impressive.

  • duheagle

    Did a bit more digging and you’re right. Silevo has a pilot plant in Fremont, CA but has – or had – deals with a Chinese outfit called HVM to do the production. Given that Solar City announced plans for a solar panel “gigafactory” in Buffalo, NY at the same time it announced the Silevo acquisition, I’m assuming Elon intends to keep Silevo’s future IP out of Chinese hands. Good move, say I.

    Incidentally, Silevo hasn’t actually demonstrated any production panels with efficiencies exceeding 21%. That’s what they were building in China when they got bought. The 24% panels seem to be what Solar City is gearing up to make in Buffalo.

    It’s been about two years since the Silevo acquisition took place. Maybe solar panels are just a wee bit tougher to make than drywall after all? Or maybe drywall is tougher to make than it looks?

  • duheagle

    “Superior” on the basis of what metric? Generators are compact and inexpensive. Solar panels with lithium-ion battery backup are neither.

  • windbourne

    had is the correct word. Silveo was going to go to China when they were bought and then Musk focused on keeping production local.
    I would like to think that the IP will remain with Tesla, but keep in mind that the head of Silveo was a Chinese guy that made heavy use of American IP and knowledge. So, he might go back with it. We will see.

    Th 23.5 or 24% was just a RECENT item. We are talking like March or April. Set a record in which somebody else (panasonic?) then beat them with a .25%. I believe that the small production line that is in CA is currently doing the 24% and they are testing the panels as they come off.

    Well, making the panels is easy, but expensive.
    Making the panels CHEAPLY and in HIGH QUANTITIES, now that is a trick. You will note that the NY giga factory is quite large and you will not find many of them with open space.
    Keep in mind that China is cheating to get their prices down. They manipulate their money and dump their products on western markets. All that money that we invested into production was destroyed by China, and we let it happen.
    Now, SC has built up their business of installing and have installation prices down. The costs of these panels from SC will save them a good chunk of change.

    Now, where life gets interesting is that with the Tesla/SC merger, Tesla has a new inverter for the cars. Lower costs, high efficiency. They will merge this with the battery and lower the costs to install those.
    In addition, they are apparently moving some electronics into the panels, but I am not sure what. However, it will increase the efficiency, and lower the installation costs, of the system even more.

    And apparently there is more, but I do not know exactly what.

  • windbourne

    You put on solar and get to lower the COSTS of your electricity.
    It provides shade for your house which lowers the costs of AC which is important for the south.
    The solar IS expensive, but pays for itself.
    The 7-10 KW battery hangs on the house or in the garage.

    https://www.tesla.com/energy

    The batter will normally kick in when your load goes up too high and then run to lower the load. With this approach, it will lower the costs of electricity for MOST home owners.

    So, you invest into a system that goes on your home, quite compactly, that cuts your energy costs all around, AND will serve as your emergency system during an outage without your having to do a THING to switch it on or re-fuel, etc.

    OTOH, when you buy a generator, you have a lot of maintenance, you have to re-fuel, and when running, it makes enough noise so that others can hear it and will grab it in the middle of the night unless you are careful.

    I used to want a generac generator, but switching to solar has saved us money and now, with the battery, I get to lower my energy costs, as well as provide emergency back-up without any extra costs or maintenance.

    BTW, 3000-5000 for a house generator is NOT cheap.

  • windbourne

    They re-did their web site.
    This is not a bad explanation of what they are up.
    https://www.tesla.com/powerwall