Tesla Motors said on Tuesday it would bid $2.8 billion to buy SolarCity, sending the solar energy company's shares soaring.

SolarCity shares popped more than 15 percent after-hours on the offer of $26.50 per share to $28.50 per share, while Tesla shares dropped as much as 10 percent, trading below $200 per share for the first time since March. SolarCity's controlling shareholder, Elon Musk, is also the CEO of electric car company Tesla. The two sets of shareholders will vote on the merger independent of Musk after a due diligence process, the Tesla CEO said. While Tesla has considered the deal "blindingly obvious" for a while, the timing seemed right as the companies released products that were increasingly aligned, Musk said in a conference call.

Elon Musk, Tesla CEO Krisztian Bocsi | Bloomberg | Getty Images

"It improves the efficiency of the setup," Musk said, focusing on lowering both cost of sales and cost of implementation."Instead of having, say, three different trips to a house to put in a car charger and solar power and a battery pack, you can actually integrate that into a single business." The merger would allow Tesla customers, who drive electric vehicles, to harness the power of the sun in an "end-to-end clean energy product" as soon as next year, Tesla said. It builds on an existing partnership between the two companies under which SolarCity uses Tesla battery packs as part of its solar projects, according to Tesla.

The deal comes on the heels of Tesla Energy, a renewable energy storage solution that launched in March 2015. "It's now time to complete the picture," Tesla said in a blog post. The SolarCity products would fall under the Tesla brand if the deal is approved, Musk said.

The world does not lack for automotive companies — the world lacks for sustainable energy companies. Elon Musk Tesla CEO