SolarCity intends to carefully evaluate the proposal, it said in an SEC filing. The company is increasingly focused toward product, Lyndon Rive, co-founder and CEO of SolarCity, said in a conference call.
"There are tremendous synergies between these two companies," Rive wrote in an email to SolarCity employees. "You should know that the board and the shareholders will be considering this, and so while I am personally excited, I will be recusing myself from the decision-making process. Ultimately, the shareholders will decide."
SolarCity shares have been under pressure, down more than 58 percent year to date. But executives said that didn't influence the terms of the deal.
Tesla shares, meanwhile, are down 8.5 percent so far this year, even as buzz grows around the new Model 3 car, which will also be unaffected by the deal, executives said on a conference call.
"I don't think this creates additional financial risk for Tesla," Musk said, saying the deal would not add significant debt to the Tesla balance sheet. Rive said that SolarCity remains on schedule to be cash flow positive on Q4. "I think it actually amplifies the opportunity for both companies," Musk added.
Musk said he's always seen Tesla as focused on sustainable energy, not an automotive company. He said he didn't know how many of Tesla's customers had solar power already or expressed interest in it.
"The world does not lack for automotive companies — the world lacks for sustainable energy companies," Musk said.