DETROIT (AP) — Tesla is making its case to shareholders that a combination with solar panel maker SolarCity Corp. would be financially as well as environmentally beneficial.
In documents released Tuesday, Tesla said SolarCity could add $1 billion in revenue to the combined company next year. SolarCity also could add $500 million in cash to Tesla's coffers over three years.
Tesla CEO Elon Musk, who is chairman of both companies, announced in June a plan to combine them in an all-stock deal worth around $2.45 billion. Shareholders of both companies are expected to vote on the deal on Nov. 17.
"Tesla and SolarCity have a tremendous opportunity to create a vertically integrated sustainable energy company," Tesla said in a post on its website.
But the merger is controversial. Neither company has achieved sustained profitability, and both are operating in markets where demand is uncertain. Plug-in electric vehicles make up less than 1 percent of U.S. sales, and less than 1 percent of U.S. electricity generation comes from solar power, according to government data.
Analysts also have questioned whether the deal could delay Tesla's first mass-market vehicle, the $35,000 Model 3, which is due out at the end of next year. Some shareholders have even sued, claiming that the merger is an attempt by Musk to use one company to bail out another. Musk owns 26.5 percent of Tesla and 22 percent of SolarCity, which is run by his cousins.
Tesla Motors Inc. shares fell 3.5 percent to close at $190.79 Tuesday before the financial details were released. SolarCity shares fell 2.7 percent to $19.07.
Palo Alto, California-based Tesla says the two companies could cut $150 million in costs in the first year of a merger by jointly marketing Tesla's electric vehicles and power storage batteries with SolarCity's solar panels. The combined company would also have a wider customer base, since Tesla has stores in the U.S., Europe and Asia but SolarCity mainly sells solar panels in the U.S. Solar systems would be sold under Tesla's name.
Last week, the companies unveiled what would be their first product: Solar roof tiles that are customizable and meant to look like a traditional roof. They would be integrated with Tesla's Powerwall, energy storage units for homes that are mounted on the wall or kept on the ground. They would also be used to power Tesla cars.