There are speculations that Tesla could acquire SolarCity in the coming days. The news comes days after Elon Musk and his cousins bought bonds in SolarCity, with Musk's purchase alone worth about $100 million.
Tesla has been working hard to expand its supply chain and improve its overall efficiency by manufacturing components like electric batteries. By manufacturing batteries instead of buying them, the company has raised profits significantly.
If Tesla acquires SolarCity, it would be able to manufacture Solar panels and batteries. As the company scales up production, it could slash prices, which could create demand for its batteries.
If the deal goes ahead, it would greatly benefit Tesla Motors. Experts have pointed out that Elon Musk seems to be treading the path of Henry Ford, who created a revolution in automobiles with a similar business model.
However, others strongly believe that the likely merger is more of a bailout for the struggling SolarCity. Musk and his cousins pointed out that the company needs help when they generously bought bonds in SolarCity recently.
The company, which manufactures solar power panels and batteries for domestic usage, landed in trouble after advocating green energy and offered to accept monthly installments from customers. Experts believe that this dependence on debt was a major risk.
One thing that is sure to happen is that customers buying Tesla's cars will have a chance to select from a range of the company's arsenal of indigenous batteries.