Tesla Motors(TSLA) - Get Report is back to stealing headlines this week.

The electric-car company, headed by charismatic yet controversial Chief Executive Elon Musk, has made for great media fodder since its inception.

From cars bursting into flames to a lawsuit against the BBC, to would-be customers camping out overnight to make a down payment, the ballyhoo surrounding the company has made it a legend and afforded him rock-star status.

But it has been a roller coaster ride for investors. The stock has experienced crazy mood swings along with the public's perception of Musk and his cars.

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And this week, a questionable decision by Tesla Motors has analysts scratching their heads and investors panicking.

On Tuesday, Tesla Motors said that it has offered to purchase SolarCity in a stock-for-stock deal worth $2.8 billion.

At first glance, the deal makes a lot of sense. The acquisition would turn Tesla Motors into a clean-energy juggernaut, an electric-car company that also provides solar power generation and storage abilities.

Not only could Tesla Motors sell a customer a car, but it could also sell the way to generate power for that car.

As Musk himself has said, "Not being able to sell [customers] solar directly at Tesla stores is quite inefficient."

The purchase would certainly solve this problem of inefficiency, but the deal itself doesn't pass investors' sniff test.

The problem is that Musk is chairman and the largest shareholder of SolarCity, owning more than 20% of each company. In addition to this deal being seen as self-serving for him, a majority of the directors of SolarCity and Tesla Motors either have financial connections to both companies or are his blood relatives.

Add in that neither company has yet proven profitable and that Tesla Motors just completed a huge round of capital-raising through a share offering, and it is a recipe for very unhappy investors.

Shares of Tesla Motors dropped by more than 10% Wednesday and are off by a bit more on Thursday. SolarCity is also trending downward, despite a slight boost Wednesday.

"We will certainly abide by the shareholder vote, so if there's a great deal of unhappiness, we won't move forward," Musk told analysts during a conference call Wednesday.

And the outspoken chief executive has also promised that he won't vote.

However, on Monday, Tesla Motors' board changed its corporate bylaws to require that future lawsuits specifically related to claims common with merger challenges against it take place exclusively in the jurisdiction of Delaware. Clearly, the company anticipated flak from its shareholders and made these changes to make potential suits against more difficult.

This type of move is common among publicly traded companies eyeing big acquisitions, but it doesn't inspire confidence among investors. This is particularly true when the purchase is being perceived as just a way for Musk to protect one of his enterprises.

Tesla Motors remains a risky play for investors. 

Although when he isn't irritating shareholders, Musk is creating a company with dynamite potential, whether he can deliver on that is the question. In the bullish case, a solar-power division would certainly be a boon, and this negative sentiment might be creating an excellent opportunity for investors to grab shares of Tesla Motors on the cheap.

However, Tesla Motors has yet to turn a profit and is plagued by chronic product delivery issues. The company's stock with its manic ups and downs, isn't for the faint of heart.

For investors who are looking for a safer and steadier way to play the electric-car industry, Toyota (TM) - Get Report remains a good choice. This favorite car company is exploring self-driving technology, which stands to be a moneymaking winner among Japan's disproportionately high senior population.

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Investors could also look to China, where there is huge demand for alternative-energy vehicles, and the Chinese government has pledged to install 4.5 million charging points over the next four years. Kandi Technologies(KNDI) - Get Report , an electric-car manufacturer that is allied with other Chinese companies such as Alibaba, is expected to have amazing growth this year as it expands into markets in Australia, Europe and the Middle East.

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But for those who are brave enough for Tesla Motors, now is a good time to hop aboard. If the SolarCity merger works out, profits could be considerable.


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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.