Shareholders overwhelmingly voted Thursday to give Elon Musk the green light to merge Tesla Motors with SolarCity, in what Musk hopes will be the first step in transforming the electric carmaker into a clean energy giant.
About 85 percent of shareholders approved the plan, which would marry Tesla’s battery storage technology with SolarCity’s photovoltaic panels and roof shingles, creating a one-stop shop for electric cars and zero-emission home energy systems. Musk, the majority shareholder in both companies, and his close associates abstained from the vote.
“Just go into a Tesla store, say yes, it all happens, it all works,” Musk said on stage at the shareholder meeting, which was broadcast on Tesla’s website. “It’s seamless and you’ll love it.”
The deal, worth $2.23 billion, faced fierce opposition on Wall Street. Both Tesla and SolarCity tend to burn through cash, and critics panned the merger as a bailout for the struggling solar roofing company.
Still, shareholders were widely expected to approve the deal. Neither company has ever paid out a dividend on its stock. Buying shares of either firm is considered a bet on Musk’s vision of a low-carbon future, not a quick payday.
“If you don’t believe in Elon,” David Whiston, an equity strategist covering car companies for the Chicago-based research firm Morningstar, told The Huffington Post in August, “why are you buying these stocks in the first place?”
Musk may have the faith of his disciples, but he could face new headwinds when President-elect Donald Trump takes office next year. The Republican has railed against clean energy, insisting that solar and wind are too expensive.
Some conservative activists are now calling on the incoming Republican Congress to end tax incentives for installing solar panels or buying an electric car.
Musk dismissed the need for subsidies, arguing that while policies help grow the industry, Tesla’s business can keep itself afloat. Last month, the company reported its first quarterly profit in three years.
“We do believe there should be government incentives for electric vehicles, but we think they should be there for the good of the industry and to accelerate the advent of sustainable transport, not because Tesla needs them,” Musk said. “Let’s say the new president did erase all incentives. Tesla’s competitive advantage would just be better.”