US electric carmaker Tesla has offered to buy solar panel company SolarCity in a bid to expand its clean energy business.

The company has made an all-stock deal worth as much as $2.8bn (£1.9bn).

Tesla shares fell 10% in extended trading after the announcement while SolarCity jumped 23%.

California-based Tesla is known as a pioneer in electric cars but since last year has also been selling batteries that can power homes and businesses.

Tesla chief executive Elon Musk described the deal as a "no brainer".

He said it would transform Tesla into the "world's only vertically integrated energy company offering end-to-end clean energy products", from solar panels and home storage batteries to electric vehicles.