SAN FRANCISCO —In a deal that brings electric cars together with solar power, Tesla Motors shareholders voted Thursday to approve a deal to acquire SolarCity.
The acquisition makes SolarCity, which is the nation's largest manufacturer and installer of solar panels, a wholly owned subsidiary of Tesla. More than 85% of shares voted were cast in favor of the acquisition.
Tesla (TSLA) shares, which closed up 2.5% at $188.66, rose 1.4% in after hours trading. SolarCity (SCTY) shares rose 2.5% after hours to $20.90.
In adding SolarCity to the portfolio, Tesla CEO Elon Musk has said that Tesla stores would become one-stop shopping emporiums where consumers can purchase solar panels, electricity storage units called Powerwalls and Powerpacks, and a growing suite of electric vehicles.
"We’re trying to make an integrated product, where you can go to Tesla store and just say yes," Musk said after the vote. "It's seamless and you love it."
Musk added that the company expects to begin producing its new solar panels "in volume in the summer of next year, but the important thing is the apples-to-apples comparison to a regular roof." He said SolarCity panels could be priced at, or even slightly below, that of a regular roof, "and the electricity is just a bonus."
Traditional solar panels stand out significantly visually on rooftops -- shiny, bulky black panels that aren't necessarily appealing to the eye. Musk's vision involves creating solar panels disguised as shingle or tiles that seamlessly integrate into a roof.
When Musk first announced his intention to buy SolarCity for $2.6 billion back in August, it was met with some scrutiny. Musk was SolarCity's largest shareholder and the acquisition seemed like a conflict of interest, especially given that SolarCity's founder, Lyndon Rive, is Musk's cousin.
What's more, some shareholders and analysts questioned whether taking on a mission to get Tesla into the home solar panel market was wise given the challenges facing the company's automotive division. While Tesla's sleek cars have quickly become status symbols, questions remain about the company's profitability as well as its ability to grapple with production snags.
Musk has repeatedly stated that Tesla is on the cusp of vaulting from a maker of niche high-end electric vehicles — its $100,000 Model S and X sedans — to a builder of more mass-market EVs thanks to its forthcoming Model 3 sedan.
Plus, he has an expansive vision: Musk has an ever-expanding vision for his companies, which include SpaceX, a rocketry startup that intends to colonize Mars.
The company plans to increase production tenfold to 500,000 units once the Model 3 comes on line, and it is in the process of building out a massive Gigafactory in the desert east of Reno, Nev., for the purpose of building both battery cells and, eventually, vehicles. The idea is that once Tesla can make its products at scale, profits will follow.
Thursday's shareholder meeting took place at Tesla's main automotive plant in Fremont, just east of San Francisco.
The deal seemed to get a boost recently when it got the endorsement of Institutional Shareholder Services, an advisory firm whose recommendations are often followed by major shareholders in contentious votes.
While the future of solar has yet to take off despite government subsidies and the opportunity for homeowners to sell power back to the grid, Musk is convinced that there are inefficiencies in the system that his company can exploit to help grow the market.
"Assuming we can make a solar roof cost less than a normal roof, then subsidies no longer matter," said Musk.
© 2017 Associated Press