If you are an investor thinking in those terms, Tesla will probably seem like a terrible company. Overvalued and unlikely to succeed once traditional car companies start taking EV seriously. Like you say, there are no fundamentals to support current valuation and there will never be.
The only way to look at Tesla is to think about it on more broad terms. It is a car manufacturer, yes, but it also is a company that provides a long range EV support infrastructure (superchargers), the (soon-to-be) largest Li-ion battery manufacturer, a domestic energy storage provider, etc...
With that perspective in mind, SolarCity fits right within the catalog of product and services. Tesla is an engineering company focusing the different applications of renewable energy and batteries. Cars just happen to be one that offers an attractive market to address now and a personal interest for Musk.
And that, I think, it's more than just faith in Elon coming through. It is a measurable market, albeit uncertain and dependent on a lot of social transformation and full of regulatory hurdles.
The "Batteries" that Tesla builds are just a bunch of Panasonic cells wired together plus some smarts to distribute the load. I don't see Panasonic remaining Tesla-exclusive for an extended period of time.
Tesla doesn't have any leverage here. Panasonic does what it wants. Tesla can decide to switch to another supplier, but Panasonic can just start selling to GM or Ford.
I was talking about Gigafactory 2.
> The potential there with SolarCity's new panels and Tesla's advantage in battery pack manufacture is pretty big,
This however is just plain old wrong....
> and they seem to be the only company poised to take advantage of solar + battery technology applications in the short to medium term.
have a look at this list...
http://cleantechnica.com/2015/01/15/27-battery-storage-compa...
or
http://www.enfsolar.com/directory/component/battery
There are many companies doing solar/batteries. Some are large and very well capitalized like GE and Siemens. The only way you could consider them "the only company poised to take advantage of solar + battery" is if you didn't bother to look for any other companies:)
I like Tesla's future but in terms of solar+battery they have alot of competition and its not at all clear that they are even the leader.
The panel side of SolarCity is a little less impressive, but the Silveo 360w panels are looking to be very competitive with other offerings in that range on price, though they will probably have lower absolute efficiency relative to the next-best offering that I know about from SunPower, and a large increase over most currently installed panel's wattage.
Or more to the point, they consider the deal more of a distraction than something that will sink Telsa. When you think Tesla, you probably think electric car, or autonomous driving car, or Elon Musk.
I mean if you hate the deal what are you going todo. The deal is almost certainly going to go through so holding shares just to vote against the deal won't do any good. You could short Tesla but over the past 5 years the street seems to love Tesla so much that bad news doesn't seem to affect the company that much.
This is a stock that has had a high short interest number for a long time. And quarter after quarter they miss numbers but the stock goes up as the shorts are forced to cover their positions when the stock fails to drop.
People aren't investing in Telsa due to any fundamental, int he financial sense, numbers, they are doing it on belief that Elon will come through. Which is good news for Tesla as they really need the short term investors on their side in the next year as they'll almost certainly have to raise cash to fund the production of the Model 3.