Court Upholds Musk’s Win in $13 Billion Lawsuit over Tesla-SolarCity Deal

Elon Musk, the CEO of Tesla, has won a long-awaited victory when the Delaware Supreme Court upheld a lower court’s determination that he did not overpay for SolarCity in a $2.6 billion acquisition in 2016. The decision puts an end to years of legal disputes and accusations that Musk engineered the agreement to protect his stake in the faltering solar startup.

Tesla CEO Elon Musk defends Tesla Inc's 2016 deal before the Delaware Court of Chancery in Wilmington

Credits: Reuters

Background of the Lawsuit:

The lawsuit was a result of Tesla purchasing SolarCity in 2016. Elon Musk, the largest stakeholder in both businesses, was accused by Tesla shareholders of pressuring the board of the automaker into the agreement to protect his investment in the faltering solar energy supplier. The shareholders argued that because SolarCity was bankrupt at the time of the acquisition, Musk should be held liable for his role in the transaction.

Delaware Supreme Court’s Ruling:

Despite several flaws in the judge’s methodology, the Delaware Supreme Court upheld the trial court’s ruling, noting that the general assumption supported the finding that Tesla paid a reasonable price for SolarCity. The court emphasised that the factual findings and credibility decisions made during the trial demonstrated that the shareholders’ notion of SolarCity’s insolvency had utterly crumbled. The 106-page, unanimous opinion strongly favoured Musk and highlighted that the trial court’s decision had not been appealed.

Impact on the Companies Involved:


The court’s decision is a big win for Tesla since it clears up the legal uncertainty surrounding the purchase of SolarCity by the corporation. With shareholders attempting to compel Musk to return Tesla stock acquired in the acquisition, the case presented a possible risk to Tesla’s good name and financial health. Since the dispute is now over, Tesla can move on without having to worry about fighting another court battle. This will free up management to concentrate on the business’s core functions and long-term goals.


The verdict in the lawsuit will affect SolarCity’s legacy even though it is no longer a separate corporation. The court’s decision upholds the acquisition’s fairness and supports Musk’s defence of the agreement. Although SolarCity’s difficulties served as a driving force for the acquisition, the court’s ruling indicated that Tesla’s involvement was motivated by genuine business concerns rather than a desire to protect Musk’s investment. A more favourable assessment of the transaction and its potential advantages for both Tesla and SolarCity may result from the lawsuit’s outcome.

Implications and Investor Sentiment:

Legal Scrutiny and Elon Musk:

Discussions concerning Elon Musk’s capacity to elude judicial scrutiny have been spurred by the court’s ruling. Concerns about the verdict have been voiced by several legal authorities and individuals who believe that Musk has once again escaped punishment. The decision strengthens Musk’s standing as a strong individual who successfully handles legal difficulties. But it’s important to remember that the court’s ruling was based on the information and arguments made in court, and that it does not exclude Musk from further legal investigation.

Investor Confidence and Shareholder Impact:

The outcome of the litigation can have an impact on Tesla investor confidence. The court’s decision clarifies and concludes the SolarCity acquisition, potentially bolstering investor morale and removing any remaining doubts about the transaction. With the court’s confirmation of the transaction’s fairness, investors who were worried about the purported overpayment and Musk’s involvement can now take action. This renewed assurance may help Tesla’s stock perform well and draw in new investors.


A protracted legal dispute comes to a conclusion with the Delaware Supreme Court’s ruling supporting Elon Musk’s victory in the $13 billion case concerning the Tesla-SolarCity merger. The decision disproves claims that Musk utilised the purchase to save his investment and demonstrates that Tesla did not overpay for SolarCity. Now that the litigation has been settled, Tesla can concentrate on its core business activities. The resolution may also increase investor confidence and take away any remaining doubts about the purchase. However, the decision has also sparked concerns about Musk’s capacity to avoid judicial investigation, further igniting debates over his stature and influence in the business world.