There is great synergy between what Tesla and SolarCity offer customers. Tesla owners charge their cars at home. Tesla’s GigaFactory plans to produce 500K cars per year in 2020, including cars priced for the mass market. Every year, 500K more cars will need to recharge after work every evening. Do you think everyone will put up with the higher electricity prices that utilities would presumably charge?

Enter the combination of SolarCity and the Tesla Powerwall home battery for EV owners. The beauty of this synergy lies in how quickly the adoption of electric cars accelerates. So far, you can almost draw a straight line through the number of EVs sold per year, but I expect that line to curve upward as Tesla reaches the mass market.

Utilities should be terrified of SolarCity, which hopes to reach 1 million customers by 2018 and is today only a $5B company. In comparison, PG&E which serves northern and central California is worth $24B today. Given the growth potential of the solar and EV markets, it is not hard to see that SolarCity will be larger than many traditional utilities in a few years.