Elon Musk wins a $13 billion lawsuit over Tesla's purchase of Solar City in 2016. This verdict indicates that Tesla's board of directors made the decision to buy the company on their own, without influence or direction from Musk, at a fair price.
The judge sided with Elon Musk in a major lawsuit filed by Tesla shareholders. They alleged that the chief executive coerced the electric vehicle company's board of directors into purchasing SolarCity in 2016. In this regard, they demanded damages in the amount of $13 billion. Shareholders claimed Tesla's $2.6 billion deal to buy SolarCity shares was to save it from financial hardship. According to them, this “rescue” was orchestrated directly by Musk. Ultimately, the judge did not find facts that would confirm this, so he ruled in favor of the head of Tesla on all points, without exception.
“[The] Tesla Board meaningfully vetted the Acquisition, and Elon did not stand in its way,” read the opinion by Vice Chancellor Joseph Slights. “Equally if not more important, the preponderance of the evidence reveals that Tesla paid a fair price—SolarCity was, at a minimum, worth what Tesla paid for it,” he added.
In fact, the purchase of SolarCity was inevitable for Tesla for one simple reason—it was in line with the company's plan and roadmap announced back in 2006. This was part of the vertical integration of the company, and although the process of merging and equally focusing on the development of the two areas was difficult, at the moment SolarCity—renamed Tesla Energy—is a rapidly growing business that generates profit.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.