Tesla dims after Musk bid for struggling SolarCity

Shares in Elon Musk’s Tesla slammed into reverse after his pioneering electric car firm launched a $2.8 billion (£1.9 billion) takeover of the celebrated entrepreneur’s struggling solar power company.

California-based Tesla is making an all-share bid valuing loss-making SolarCity at between $2.6 billion and $2.8 billion — a 30% premium to its share price, which has dived almost two-thirds in a year.

PayPal co-founder Musk is the largest shareholder of both Tesla and SolarCity.

Tesla said the tie-up with debt-laden Solar would create “the world’s only vertically integrated energy company… this would start with the car that you drive and the energy that you use to charge it, and would extend to how everything else in your home or business is powered.”

Investors, concerned about the effect of the deal on Tesla’s road to profitability, sent its shares tumbling 12% to $192.75 in after-hours trading.

Musk said in a conference call: “Tesla is hell-bent on becoming the best manufacturer in the world.”