If Tesla Motors succeeds in buying SolarCity, the solar panel factory now being built in Buffalo will be a key part in Elon Musk’s vision to create a sustainable energy juggernaut.
The high-efficiency panels that SolarCity plans to make in Buffalo will be an important part of efforts to reduce costs and speed the adoption of solar energy, Musk said in a conference call Wednesday.
And extending the use of solar energy is part of Musk’s broader vision of putting Tesla at the center of what he sees as the sustainable energy industry of the future: Combining solar power with batteries that allow it to be stored and used at any time of the day or night, and building affordable electric cars that eventually replace today’s gas-powered vehicles.
“This is what the world needs: Solar power, stationary storage and electric cars,” Musk said. “Tesla is going to be the leader in all three.”
What’s more, he projects the merger will make for an even stronger company.
“I’m highly confident we will be the world’s best manufacturer, not by a small margin, but by a margin most people don’t believe is possible,” Musk said.
The panels that SolarCity plans to make in Buffalo will be able to convert more of the sun’s energy into electricity than was possible with previous panels, allowing the company’s systems to generate as much power as a conventional system with fewer panels and less equipment. Likewise, a high-efficiency system with a similar surface area could generate more power.
“On the same roof, you can get as much as a third more power” using technology developed by Silevo, the solar panel manufacturer SolarCity acquired two years ago, Musk said.
Tesla’s bid to buy SolarCity, valued at between $2.6 billion and $2.8 billion, would put a new company at the helm of North America’s biggest solar panel factory, which the state is building on South Park Avenue as the centerpiece of Gov. Andrew M. Cuomo’s Buffalo Billion economic development initiative.
“We don’t expect the offer to impact our plans in Buffalo,” said Lyndon Rive, SolarCity’s CEO.
Musk said he is “very optimistic” about SolarCity’s plans to release new products in the coming months that will “significantly differentiate” it from its competitors in the solar energy industry. Because SolarCity hasn’t said what those new products are, Musk said he couldn’t discuss them in detail.
But he said the Silevo solar panel technology – which forms the basis for the solar panels that will be made in Buffalo – will be a difference-maker for SolarCity.
“There’s the Silevo acquisition, which we still think is the best technology out there for high-efficiency, low-cost solar panels and, at the same time, dramatically improving the aesthetics of having solar panels on your roof,” Musk said. “The Silevo technology is going to make quite a big difference ... There are dramatic improvements.”
“The full extent of that is not yet public information, but I do believe it fits in very well with Tesla’s plans on the PowerPack/PowerWall side of the business,” Musk said.
Musk said the timing of the deal makes sense, with Tesla ramping up its PowerWall and PowerPack battery products, and SolarCity is moving ahead with its plans in Buffalo for mass production of its high-efficiency solar panels.
“I’m doing this because I think it makes things better in the future for everyone,” Musk said. “I have zero doubt about this. Zero... Arguably, we should have done this sooner.”
Cuomo, during a stop in Buffalo on Wednesday, said he wasn’t concerned that a Tesla takeover of SolarCity could lead to a scaled-back commitment to the Buffalo factory. He said he didn’t worry the deal could affect SolarCity’s pledge to bring 2,900 jobs to the Buffalo Niagara region, both at the plant and through its suppliers and service providers.
“If it actually went through, I can’t see anything but good,” Cuomo said. “Tesla is a $20 billion company. SolarCity is a $2 billion company. If Tesla takes over SolarCity, that makes the company that much stronger.”
The deal, if it is approved by shareholders of both companies, would shift control of the factory to Tesla, which is run by Musk, who also is SolarCity’s chairman and Rive’s cousin.
“If anything, it can only be better,” Cuomo said. “It can’t be worse.”
Cuomo denied any concerns. He said close familial and work ties between Tesla and SolarCity would make a merged company stronger.
“The two companies are basically affiliated, to begin with. There are family relationships between the two and they work very closely together,” Cuomo said. “This is not a hostile takeover. This is a family situation, basically. They work together. So no, if anything, I think it would just say that the parent company is just 10 times as strong as the original company, SolarCity.”
Cuomo also said he was comfortable with Musk playing a larger role in the solar panel factory project, should the takeover be completed.
“I don’t want to start family trouble between the cousins,” he said. “The leadership of SolarCity is great. There’s no doubt that Elon Musk is an international figure in this space.”
“We’re comfortable with SolarCity. It’s a major company. It has significant resources,” Cuomo said. “Tesla would be even better.”
Cuomo said he had not spoken with Musk since the deal was announced Tuesday afternoon, but that he expected to be in contact with him.
“I have in the past and I will again,” he said.