Investors that find Tesla (NASDAQ: TSLA) too expensive might be surprised to learn that Elon Musk has another publicly traded company; SolarCity (NASDAQ: SCTY), that has a very low share price.

SolarCity was trading at $24.28 a share at the end of business on April 1, 2016. At the same time, Tesla shares were fetching a ludicrous price of $237.59 apiece. This means one stock could be a bargain and one the most overpriced issue on the market.

Musk acts as the chairman of SolarCity; while his cousins Lyndon and Peter Rive serve as chief executive and chief technology officer. Like Tesla, SolarCity has an ambitious business model designed to change the way the world produces and uses energy. SolarCity manufactures, installs and leases solar electric systems for businesses and homes.

Like Tesla, SolarCity has plans to enter the household battery storage market. The idea is that consumers would use the solar panels to generate electricity stored in Tesla’s batteries.

SolarCity has something else in common with Tesla, it is building a giant factory to guarantee its own source of solar panels. The company currently relies upon outside manufacturers including some based in China for solar panels.

SolarCity is building a 1.2 million square foot “Solar Gigafactory” in Buffalo in Upstate New York intended to produce enough solar panels to produce one gigawatt or one billion watts of electricity by 2017. Since the solar panels currently produce around 250 watts a piece that’s a lot of cells.

New York State’s Solar Gigafactory

Solar cell production at the Buffalo plant; which is designed to employ around 500 people, is scheduled to begin sometime this year. Another goal of the plant is to increase the efficiency of solar panels from 21% to 26%, which will increase the amount of electricity they can supply.

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As at Tesla, Musk is trying to create a new industry here he wants to manufacture enough solar panels to generate five gigawatts of electricity sometime in the near future. That sounds as if Musk and the Rives want to expand their company worldwide.

Currently SolarCity only operates in the United States where it can take advantage of state laws in states like California that require utilities to buy electricity from property owners with solar electric systems. SolarCity’s systems are designed to feed power back into the electric grid.

This business model could be threatened because utilities in some states like Nevada want to reduce the amount they pay home owners for electricity. The Wall Street Journal reported that Solar City had pulled out of Nevada after such subsidies ended in that state.

Does Solar City Make Money?

Despite that SolarCity’s revenues are currently growing they increased by $144.59 million (€128.95 million) in 2015 growing from $255.03 million (€227.44 million) to $399.62 million (€356.39 million) between December 2014 and December 2015. Solar also generated $2.395 billion (€2.14 billion) in cash from financing during the fourth quarter of 2015.

Musk is taking some serious risks here, SolarCity reported a loss of -$58.33 million (-€52.02 million) and free cash flow of -$823.04 million (-€734.01 million) during the fourth quarter of 2015. That means the revenue generated by the leases on the solar panels is not covering the costs of SolarCity’s operations so this company is still very much gamble even if it is a fun and ecofriendly venture.

Yet SolarCity is also a gamble you might be able to take because its shares were trading at $21.56 (€19.23) on March 28. Therefore if you are looking for a cheap way to invest in one of Elon Musk’s enterprises I’d recommend that you check out SolarCity. It’s a very interesting company that could change the world and make a lot of money in the process.

https://i2.wp.com/geekcrunch.reviews/wp-content/uploads/2016/04/solar-city-van-roof.jpg?fit=600%2C344&ssl=1https://i2.wp.com/geekcrunch.reviews/wp-content/uploads/2016/04/solar-city-van-roof.jpg?resize=150%2C150&ssl=1Daniel JenningsInvestmentsDoes Solar City Make Money?,Elon Musk,New York State’s Solar Gigafactory,Solar cell production,Solar Gigafactory,SolarCity (NASDAQ: SCTY),SolarCity’s revenues,Tesla (NASDAQ: TSLA)Investors that find Tesla (NASDAQ: TSLA) too expensive might be surprised to learn that Elon Musk has another publicly traded company; SolarCity (NASDAQ: SCTY), that has a very low share price. SolarCity was trading at $24.28 a share at the end of business on April 1, 2016. At the same...From A Geek to a Geek