The Mad Genius of Elon Musk
On June 21, Elon Musk made an offer as the CEO of Tesla Motors to purchase SolarCity, a company where he also serves as chairman. The surprise offer to purchase SolarCity is leaving some to question the inherent conflict of interest, seeing that Musk himself already owns 20% stakes in both companies. In an attempt to assuage concerns, Musk has recused himself from the board and shareholder voting process.
Silicon Valley is a strange and unforgiving place. The $2.86 billion dollar plan to combine Tesla and SolarCity is forcing analysts to take a second look at their stock value. Morgan Stanley Analyst Adam Jonas reported that the acquisition of SolarCity will not "help [Tesla] make better cars." Meanwhile, UBS Ltd. Analyst Colin Langan adds, "We are cautious on the deal as synergies seem limited, it adds complexity, and most importantly it could potentially be an unneeded distraction for Tesla management."
Elon Musk is no stranger to controversy. In 2015, the State of New Jersey bet against Musk and lost. New Jersey's decision to ban Tesla from selling directly to customers was quickly overturned. In my opinion, it's better to bet on Musk than to bet against him. SolarCity - a company dedicated to the creation of sustainable solar energy - fits squarely within his plans for Tesla. SolarCity has participated in development projects for electric vehicle chargers and energy storage with Tesla in the past. Do either of those sound like something Tesla Motors might be interested in long-term?
Tesla pursues much more than simply automotive manufacturing, and its controversial CEO frequently works in multiple industries. Elon Musk's ambitious rise shows no signs of stopping and he has no intention of simply producing cars. A glance at the work he's done with SpaceX should decisively dismiss any notions of a lack of ambition.
Elon Musk has spent significant time and money developing advanced batteries for his vehicles and the supercharger stations to power them. "The world does not lack for automotive companies - the world lacks for sustainable energy companies," Musk said on Tuesday. "The opportunity here is to have a highly innovative sustainable energy company that answers the whole energy question from power generation and storage to transport."
As things stand, there are multiple hoops for Tesla customers to jump through just to use solar power. They'd need to have the solar panels installed, then purchase a proper replacement battery back. Musk's vision is simple: integration. By combining Solar City's sustainable energy business with Tesla's lineup of electric automobiles, Musk stands poised to completely cut out the oil industry middle-man. Acquiring a company that specializes in solar-powered energy collection and storage sounds like a natural fit for a company like Tesla. The deal may never come to fruition, but Elon Musk has his own way of doing things and time will tell if this gamble will pay off.
Of the deal, Musk added, "We are a sustainable energy company, this is, broadly speaking, right in line with that. In order to solve the sustainable energy problem you need generation, storage, and electric cars." Meanwhile, Elon Musk is barreling full-steam ahead. Pundits may call him crazy, but his genius and vision is undeniable. No other industry leader is in a better position to make their vision for the future a reality.
David Kirby is a screenwriter, editor, and columnist. You can find more of his work at the Huffington Post.
