SolarCity deal 'zero value' for Tesla, according to Morgan Stanley

US investment bank Morgan Stanley said there is no value attached to Tesla's acquisition of SolarCity, which was approved earlier this month by shareholders in Elon Musk's company despite strong criticism of the deal.

Musk is the majority shareholder in both companies, and several investors had raised concerns about a potential conflict of interest, as well as the profitabaility of both entities.

Analysts at Morgan Stanley shifted the price target on Tesla's stock to $242 from $245.

"Given (SolarCity’s) financial condition and recent reduction in guidance, we have assumed zero value for (SolarCity) equity to (Tesla) shareholders," the analysts said.

MS expressed doubts that Tesla could fully integrate the new company into their innovative cars, and said that it would be quite a while before there would be any merger in such technology.

"The bigger mission remains developing a sustainable transportation ecosystem."

SolarCity produces solar-powered panels for houses and cars, and Musk has spoken of his desire to combine the two and ultimately make cars which are completely powered by energy from the sun.