Tesla Motors Inc. said it won’t buy battery company SolarCity Corp. after a recent acquisition.
The acquisition is a major step in Tesla’s efforts to increase its battery business, which is already one of the biggest drivers of Tesla’s profit.
The Palo Alto, Calif., electric-car maker also said it will buy solar-panel manufacturer SolarCity’s $5.2 billion purchase of SolarCity Energy, a joint venture that makes solar panels and other solar products.
The deal is expected to close by the end of 2019, Tesla said.
SolarCity has about 1,000 employees and plans to employ 500 people, the company said in a statement.
It said it plans to expand into battery production and distribution.
Solar City said in May that it was expanding its solar business to other solar-related businesses.
The deal would make SolarCity one of Tesla and SolarCity co-founders, and the company would be Tesla’s largest shareholder.
Tesla, which has said it would buy solar panels for vehicles and other projects, said it is also considering acquiring solar panel manufacturer SunPower Corp.
Solar is the largest consumer solar-energy company in the U.S. but its battery operations are struggling.
SolarCity said in March it had made $7.8 billion in revenue for the first three months of 2018, down from $16.4 billion for the same period last year.
The company has been struggling to make money as it has struggled to expand its business, as consumers are increasingly switching to solar power, including solar rooftops, for their homes and businesses.
Solar has been the target of some competition from competitors such as SunEdison Corp., which has a solar panel business in California.