Tesla Motors Inc surprised Wall Street last week with a move for to acquire SolarCity. Of Course, Tesla wants to buy SolarCity but it is obvious that CEO Elon Musk is behind the move. The move to acquire SolarCity seems to be the most polarizing move that Musk has made in recent times. However, the downtrend in Tesla’s stock suggests that many people don’t think that it is smart to acquire SolarCity.
Wall Street largely believes that the move to acquire SolarCity is an attempt to bail out the failing solar firm with Tesla’s strong brand recognition. After all, Musk has a 22.5% stake in SolarCity, and his cousin, Lyndon Rive runs the company. Hence, it is easy to submit that Musk has an agenda that might not necessary be in the best interest of Tesla’s shareholders. However, Musk is moving ahead with the acquisition of SolarCity even before shareholders have had a chance to vote.
Tesla applies for 6 new trademarks to sell solar energy
Tesla Motors might be making a show and sham of claiming that the acquisition of SolarCity is contingent on the vote of shareholders. The firm is already speeding toward the solar highway and making moves that indicate confidence that the deal will go through Recent trademark filings show that Tesla has filed 6 new trademark applications. News has it that Ariana Hiscott, Tesla’s trademark and copyright attorney at Cooley LLP filed the applications on June 22. Apparently, Tesla filed for patents in the same day it announced its intent to acquire SolarCity without waiting for shareholders’ approval.
The trademark applications reveal that the firm wants to sell wide range of solar products and services. The firm filed a trademark application to sell the following products. “Solar energy equipment, namely, photo-voltaic solar modules for converting electronic radiation to electrical energy; and equipment for use in collecting and converting solar into electricity, namely, solar cells and inverters.”
The firm also filed to trademark in offering the following services. “Installation, maintenance and repair of solar panels and other equipment for use in converting solar energy into electricity; installation of solar energy systems and consulting related thereto.”
Sentiments about Musk’s agenda aside, buying SolarCity is smart
The move to acquire SolarCity doesn’t make much sense from a cursory look at the circumstances surrounding the deal. However, an objective look about the acquisition of SolarCity suggests that the deal might make sense in the long term. To start with, oil firms are not really bothered by Tesla Motors and EVs now. However, oil firms will start seeing EVs are serious rivals once the mass-market Model 3 makes it to the market – especially if the car secures rave reviews.
However, the success of the Model 3 will put a strain on the revenue of traditional automakers and oil firms. At that point, Elon Musk would be unstoppable but oil companies would try to frustrate EVs by building many oil-based charging plants that EVs owners will pay to use. The advent of oil-based charging plants will kill many solar firms because they’ll be relatively weak in relation to the oil firms. In fact, oil companies wouldn’t exert much effort to frustrate fledging solar firms out of business.
However, Tesla’s purchase of SolarCity will ensure that there is a solar firm strong enough to contend with oil firms. In the next three to five years, the energy battle would have shifted from cars to power generation. Musk is getting ready to strengthen its energy production unit before oil companies start to kill fledging solar businesses.