Market Insider

SolarCity, Tesla shares drop after announcement

Shares of Tesla Motors and SolarCity gave up ground Tuesday afternoon following Tesla's announcement of new electric vehicle models.

Shares of both companies had jumped earlier after SolarCity Chairman and Tesla CEO Elon Musk tweeted about the announcement.

At their highs, the electric automaker's stock jumped about 2.49 percent in intraday trade, while SolarCity shares climbed as much as 1.9 percent. Both stocks, however, gave up their gains late in the day after Tesla announced new versions of its Model S sedan and Model X crossover.

SolarCity shares were last slightly higher, while Tesla shares were modestly higher, up nearly 1 percent.

In June, Tesla said it would offer $2.8 billion to buy the solar energy company. Musk is a controlling shareholder of SolarCity and also the CEO of the electric car company.

Tesla said that the merger would allow its customers to harness the power of the sun in an "end-to-end clean energy product" as soon as next year.

SolarCity shares have plunged 43 percent this year while Tesla shares have fallen 2 percent.