In 2016, Tesla acquired SolarCity, the American solar-energy company founded by Elon Musk’s cousins Peter and Lyndon Rive.
Tesla announced the all-stock transaction on August 1, 2016, valuing SolarCity at approximately $2.6 billion. Shareholders approved the deal in November, and it closed on November 21. Tesla then combined SolarCity’s solar business with its existing energy-storage operations, creating the foundation of Tesla Energy.
The acquisition was intended to connect electric vehicles, home batteries, solar panels, and electricity generation in one sustainable-energy ecosystem. SolarCity had been one of the largest U.S. residential solar installers, often using long-term leases that reduced customers’ upfront costs.
A common mix-up is confusing SolarCity with Tesla’s later solar-panel and rooftop-solar products. Those products came from the acquired SolarCity business, while Tesla’s original focus was electric vehicles and battery technology. The deal was also controversial because SolarCity was facing significant debt and liquidity pressure, although a Delaware court later ruled in Elon Musk’s favor in a shareholder lawsuit.