During a conference call discussing the rationale surrounding Tesla’s (TSLA) offer to acquire SolarCity (SCTY) this morning, Elon Musk made a bold claim, something not unusual for the billionaire entrepreneur, he said that he sees potential for Tesla to become a trillion-dollar market cap company – which would be a first.
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As of yesterday’s market close, Tesla was valued at $32 billion and the deal to buy SolarCity is valued at about $2.9 billion. Based on the current outstanding share count, the stock would be valued at ~$6,843 per share versus the last closing price of $219.
It’s not the first time that Musk suggested that Tesla could become the most valuable company in the world. Apple is currently the biggest public company by market cap with $525 billion and last year, Tesla’s CEO said that the automaker could surpass Apple’s market cap sometime in the next decade.
Musk described the deal to merge Tesla and SolarCity as contributing to this goal.
He said that combining electric vehicles (Tesla Motors), energy storage (Tesla Energy) and solar power (SolarCity), is “the solution to the earth’s climate change problem”. The goal is to generate clean renewable energy, store it in Tesla’s stationary energy storage products and consume it in Tesla’s vehicles.
Tesla’s CEO added that merging the company will enable a better distribution of those products and make it easier for customers to purchase new electric vehicles powered by solar energy. He also expects the merger to cut the sales costs of both companies by 30 to 40 percent, especially through reducing the number of visits that sales people and installers need to make to a house in order to sell and install a new solar array and battery pack.