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Tesla makes offer to acquire SolarCity, Elon Musk doubles down
BREAKING: Tesla’s board of directors has made a bid to acquire SolarCity. The proposed acquisition of SolarCity by Tesla would amount to an approximate $2.8 billion stock-only deal or a premium of 21% to 30% over today’s SolarCity (NASDAQ:SCTY) closing price.
The two companies have shared history with one another through strategic partnerships that have allowed each company to leverage its core technology to provide clean energy and off-grid energy storage. Not only do both companies share a mission rooted in accelerating the transition to a sustainable energy future, they also share arguably the most critical component to driving this mission forward – Elon Musk.
Musk sits as chairman at SolarCity and also the largest individual shareholder of the company. He’s also majority shareholder and CEO at Tesla, now split into automotive division Tesla Motors, and Tesla Energy which designs and manufacturers the Powerall and Powerpack lithium-ion battery storage system used in SolarCity’s massive solar power projects.
By combining the two entities, Tesla will be able to effectively control design, strategy, and production by ultimately unifying operations under a single umbrella. Tesla’s statement reads:
“We believe that the possibilities for product, service and operational synergies would be substantial, and that a combination would allow our companies to build on our respective core competencies and remain at the forefront of delivering innovative approaches for sustainable transportation and energy.”
Full Statement from Tesla:
Tesla’s mission has always been tied to sustainability. We seek to accelerate the world’s transition to sustainable transportation by offering increasingly affordable electric vehicles. And in March 2015, we launched Tesla Energy, which through the Powerwall and Powerpack allow homeowners, business owners and utilities to benefit from renewable energy storage.
It’s now time to complete the picture. Tesla customers can drive clean cars and they can use our battery packs to help consume energy more efficiently, but they still need access to the most sustainable energy source that’s available: the sun.
The SolarCity team has built its company into the clear solar industry leader in the residential, commercial and industrial markets, with significant scale and growing customer penetration. They have made it easy for customers to switch to clean energy while still providing the best customer experience. We’ve seen this all firsthand through our partnership with SolarCity on a variety of use cases, including those where SolarCity uses Tesla battery packs as part of its solar projects.
So, we’re excited to announce that Tesla today has made an offer to acquire SolarCity. A copy of Tesla’s offer is provided below.
If completed, we believe that a combination of Tesla and SolarCity would provide significant benefits to our shareholders, customers and employees:
- We would be the world’s only vertically integrated energy company offering end-to-end clean energy products to our customers. This would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered. With your Model S, Model X, or Model 3, your solar panel system, and your Powerwall all in place, you would be able to deploy and consume energy in the most efficient and sustainable way possible, lowering your costs and minimizing your dependence on fossil fuels and the grid.
- We would be able to expand our addressable market further than either company could do separately. Because of the shared ideals of the companies and our customers, those who are interested in buying Tesla vehicles or Powerwalls are naturally interested in going solar, and the reverse is true as well. When brought together by the high foot traffic that is drawn to Tesla’s stores, everyone should benefit.
- We would be able to maximize and build on the core competencies of each company. Tesla’s experience in design, engineering, and manufacturing should help continue to advance solar panel technology, including by making solar panels add to the look of your home. Similarly, SolarCity’s wide network of sales and distribution channels and expertise in offering customer-friendly financing products would significantly benefit Tesla and its customers.
- We would be able to provide the best possible installation service for all of our clean energy products. SolarCity is the best at installing solar panel systems, and that expertise translates seamlessly to the installation of Powerwalls and charging systems for Tesla vehicles.
- Culturally, this is a great fit. Both companies are driven by a mission of sustainability, innovation, and overcoming any challenges that stand in the way of progress.
Today’s offer to acquire SolarCity is only the first step toward a successful combination of Tesla and SolarCity. We will provide a further update if and when an agreement is reached.
June 20, 2016
Mr. Lyndon R. Rive
Chief Executive Officer
SolarCity Corporation
3055 Clearview Way
San Mateo, CA 94402
Dear Lyndon:
We are pleased to submit to you and the SolarCity board of directors a proposal to acquire all of the outstanding shares of common stock of SolarCity in exchange for Tesla common shares. Subject to completing due diligence, we propose an exchange ratio of 0.122x to 0.131x shares of Tesla common stock for each share of SolarCity common stock. This proposal represents a value of $26.50 to $28.50 per share, or a premium of approximately 21% to 30% over the closing price of SolarCity’s shares, based on today’s closing price of SolarCity’s shares and the 5-day volume weighted average price of Tesla shares. We believe that our proposal offers fair and compelling value for SolarCity and its stockholders, while also giving SolarCity’s stockholders the opportunity to receive Tesla common stock at a premium exchange ratio and the opportunity to participate in the success of the combined company through their ongoing ownership of Tesla stock.
The board of directors of Tesla is excited at the prospect of a potential combination of SolarCity’s business with Tesla. We believe that the possibilities for product, service and operational synergies would be substantial, and that a combination would allow our companies to build on our respective core competencies and remain at the forefront of delivering innovative approaches for sustainable transportation and energy. We believe that a combination would generate significant benefits for stockholders, customers and employees of both Tesla and SolarCity.
We are committed to a possible transaction that is fair to SolarCity’s and Tesla’s respective stockholders. To help ensure that, Tesla is prepared to make the consummation of a combination of our companies subject to the approval of a majority of disinterested stockholders of both SolarCity and Tesla voting on the transaction. In addition, as a result of their overlapping directorships, Elon Musk and Antonio Gracias have recused themselves from voting on this proposal at the Tesla board meeting at which it was approved, and will recuse themselves from voting on this proposal at the SolarCity board as well. We believe that any transaction should be the result of full and fair deliberation and negotiation by both of our boards and the fully-informed consideration of our respective stockholders.
Our proposal is subject to the satisfactory completion of due diligence, the negotiation of mutually agreeable definitive transaction documents, and final approval by the Tesla board. While a transaction would be further subject to customary and usual closing conditions, we believe that Tesla is well positioned to negotiate and complete the transaction in an expedited manner. We do not anticipate significant regulatory or other obstacles in consummating a mutually beneficial transaction promptly.
In light of Elon Musk’s SEC disclosure obligations in his individual capacity as a stockholder of SolarCity this proposal will be publicly disclosed, but Tesla’s intention is to proceed only on a friendly basis.
We look forward to discussing a potential transaction with you, and hope to expeditiously enter into a definitive agreement.
Sincerely,
The Board of Directors of
Tesla Motors, Inc.
Tesla has upgraded the Model Y’s two most affordable trims, the Rear-Wheel-Drive and All-Wheel-Drive, with two new interior features that bring them level with their “Premium” siblings.
The Rear-Wheel-Drive (RWD) and All-Wheel-Drive (AWD) trims, formerly known as the “Standard” offerings of Tesla’s most popular vehicle, are now fitted with the all-black headliner and a higher-quality 16-inch center screen, two features that were added to the Premium trims earlier this year.
Here’s what the new Black Headliner looks like compared to the old design in the Model Y RWD and AWD: https://t.co/vaMUZz30UC pic.twitter.com/i1yXjJNu7L
— TESLARATI (@Teslarati) June 5, 2026
The RWD and AWD trims of the Model Y now have a more premium interior feel with these upgrades, and it also appears to be a move by Tesla to streamline manufacturing by eliminating variance across configuration levels.
It makes production less complicated when the interior colors are all identical. Additionally, all Model Y builds now have the larger and higher-resolution screen than previous model years.
Priced at $39,990 and $41,990, respectively, the Model Y RWD and AWD are quite different from the Premium trims. Tesla aimed to make an affordable version of what has been the best-selling car in the world on several occasions, enabling more accessibility.
The differences from an interior standpoint are noticeable, as there is significantly less storage, a lack of A/C seats, and no glass roof. However, the car is still a great option and features a good powertrain, strong range ratings of 321 miles for the RWD and 294 miles for the AWD, and a great ride quality.
Tesla Model Y Standard Full Review: Is it worth the lower price?
Other shortcomings are the lack of acoustic-lined windows, which are featured in the Premium trims to help with excess cabin noise. In our testing of the Model Y Standard back in late 2025, this was perhaps the most noticeable difference between it and the Premium trim. The stereo was also a huge difference:
This now includes the Model Y RWD and AWD, the two trims that were formerly know as “Standard”
You can see what the big differences are between the RWD/AWD and the Premium below:
https://t.co/ptLnm95KjX https://t.co/vaMUZz30UC pic.twitter.com/scuRNErXoC
— TESLARATI (@Teslarati) June 5, 2026
The RWD and AWD trims of the Model Y are still a great vehicle at an affordable price, and you can experience them for yourself at your local Tesla showroom. Test drives are always available, and it’s a great way to experience an EV for yourself, especially if you have no knowledge about them.
Tesla has its answer to grow its automotive sales over the next few years, TD Cowen analyst Itay Michaeli says, but it just has to bring it to the U.S.
On Thursday, Michaeli reiterated his $490 price target and the ‘Buy’ rating he already held on Tesla stock (NASDAQ: TSLA). However, its automotive division has struggled to show sequential growth over the past few years, mostly due to its focus on AI and Full Self-Driving. Tesla already axed two of its lower-volume vehicles with the Model S and Model X earlier this year.
However, Tesla does not need to engineer an entire new vehicle to trigger an upward tick in sales; it just has to bring it from China to the U.S., Michaeli said.
He is talking about the Model Y L, a slightly larger version of the all-electric crossover that is already available in China. U.S. customers have been pleading with CEO Elon Musk to bring it to the country since its launch in Asia last year, but he’s not convinced of it because of the advent of self-driving and its importance in this particular market.
The problem is that Tesla owners have been requesting something larger that could fit a typical American family. The Model Y L is slightly larger than the standard Model Y, but some are concerned that it could still be too small to fit what most people might need.
Instead, they have asked for a full-size SUV from Tesla.
Tesla gives big hint that it will build Cyber SUV, smaller Cybertruck
Nevertheless, the Model Y L still presents a great opportunity for Tesla in the U.S., and Michaeli says that there is an additional sales opportunity of about 100,000 units, with demand potential falling somewhere between 60,000 and 135,000 units.
TD Cowen’s note to investors also analyzed that Tesla’s growth could come from a stock perspective as well, positively impacting the stock price, as it has been widely reliant on vehicle sales, even though Tesla has truly phased itself away from that being an important metric.
Tesla stands to gain greatly from the introduction of the Model Y L in the U.S., but only if Elon Musk sees it as a viable fit for the market. Families may need to see Tesla bring something larger to the U.S., or they might be forced to buy from another automaker that offers something that fits is needs for more interior space to haul around the kids.
Tesla Hardware 3 owners are set to get a new Full Self-Driving version this month as the company plans to release what it is referring to as v14 Lite.
The rollout is not yet confirmed for June, but Tesla executives have stated on several occasions that this more refined FSD iteration will work with their cars and increase its capabilities.
This comes after Tesla admitted during its last Earnings Call that these Hardware 3 vehicles would not be able to achieve Full Self-Driving, something that they did not know when they bought these cars. We regularly receive messages from Hardware 3 owners asking when v14 Lite will come out, what they should expect, and whether it is worth it to upgrade the self-driving computer or buy a new car altogether.
Following future rollout of FSD V14 Lite for HW3 vehicles in the US, we plan on expanding V14 Lite to additional international markets.
This update ensures that HW3 vehicle owners will continue to benefit from ongoing software updates.
Since international rollout is subject to…
— Tesla (@Tesla) April 29, 2026
It is hard not to feel for them; Tesla CEO Elon Musk said at the company’s 2019 Autonomy Day that all vehicles produced at the time, including Hardware 3 cars, had “all the hardware necessary, compute and otherwise, for Full Self-Driving.”
Musk also said in March of that year that, “Anyone who purchased Full Self-Driving will get FSD computer upgrade for free.”
Anyone who purchased full self-driving will get FSD computer upgrade for free. This is the only change between Autopilot HW2.5 & HW3. Going forward “HW3” will just be called FSD Computer, which is accurate. No change to vehicle sensors or wire harness needed. This is v important. https://t.co/lICMpT7xnX
— Elon Musk (@elonmusk) March 29, 2019
However, during the Q1 2026 Earnings Call, Musk admitted that Hardware 3 vehicles would not be capable of FSD, as “It has only 1/8th the memory bandwidth of Hardware 4, and memory bandwidth is one of the key elements needed for unsupervised FSD.”
Tesla has made some effort to remedy these Hardware 3 owners by offering:
- Discounted trade-ins toward AI4 cars
- Hardware retrofits, which would replace the self-driving computer and upgrade all cameras
- Full Self-Driving v14 Lite
The issue is that many of these owners were led to believe their cars would be capable of unsupervised self-driving. Now, they’re left scrambling for options, and while there are several, they will all require more money out of their pockets.
Expectations for Tesla v14 Lite for Hardware 3 Owners
The big differences between the AI4 v14 and v14 Lite for Hardware 3 owners will stem primarily from hardware constraints. Tesla developed v14 Lite with an optimized frame of mind; the v14 neural nets are toned down to run on an HW3 computer.
Tesla v14 will use the same behavior, but its limits will be hardware-related, especially given that the cameras on HW3 vehicles are lower-resolution.
Tesla reveals its plans for Hardware 3 owners who are eager for updates
This will result in potentially more edge cases due to the lower quality perception and less long-range detection, but reaction time and overall confidence should be more refined.
There should also be a handful of additional features that are available on AI4 cars, such as:
- Starting Full Self-Driving from Park
- Auto Shift
- Streaks
- Speed Profiles
- Improved Dynamics, like Pulling Over for Emergency Vehicles
Tesla plans to release v14 Lite this month, but we are all familiar with how the company can be with timelines. Additionally, if v14 Lite has not proven to be ready for a wide release, Tesla will slam the brakes on the rollout.
We would anticipate that Tesla is testing v14 Lite internally, and likely has been for several months.
Tesla upgrades Model Y’s affordable trims with new interior features
Tesla has its answer to auto growth, it just has to bring it to the U.S.: analyst
