Tesla Motors Inc. on Monday said it closed the acquisition of SolarCity Corp., paving the way for Chief Executive Elon Musk to begin integrating the solar-panel business into the auto maker to create an integrated clean-energy company.

Shareholders of both companies approved the merger last week.

Mr. Musk, who was chairman of SolarCity and the largest shareholder of both companies, wants to target customers with solar panels and batteries to let them power their homes and electric cars with clean energy.

The challenge of combining the companies comes as Tesla next year begins selling the new Model 3 sedan, a vehicle that could helpthe auto maker boost production to 500,000 in 2018 from about 50,000 last year.

Write to Tim Higgins at Tim.Higgins@wsj.com

(END) Dow Jones Newswires

November 21, 2016 11:25 ET (16:25 GMT)

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