Tesla has made a $5.3 billion investment into California-headquartered electric car company SolarCity and will soon launch a new electric car, The Next Step.
The company says the deal is designed to bring solar and electric vehicles to the market faster than Tesla can build them.
Tesla said it will be the first automaker to build an electric car from scratch.
The first 100 cars the company will produce will be made by SolarCity.
SolarCity will continue to operate as a vertically integrated, privately held, publicly traded company that has raised a total of $3.6 billion in financing.
Solar City plans to produce around 100,000 cars annually.
“SolarCity is an example of a vertically-integrated company that can scale quickly and scale profitably, and that has a long-term view to be a leader in this industry,” said Steve Jurvetson, Tesla’s chief financial officer, in a statement.
“We’re thrilled to have SolarCity join Tesla, and look forward to further collaboration in the future.”
Tesla announced the $5bn investment in SolarCity on Monday, and SolarCity has been growing its fleet of batteries and batteries storage technology.
The automaker expects to produce 100,00 electric vehicles annually by 2020.
Tesla currently has over 5 million electric vehicles on its hands, and the company has said it is adding a million more this year.
Tesla is the first carmaker to buy into a vertically owned company, and it has been expanding its operations around the world.
The solar company is already manufacturing battery cells for its solar-powered cars and has a solar factory in Nevada.