Elon Musk made a new comment about being open to discuss a merger between Tesla and other automakers.
The comment is interesting in the context that Tesla is now the world’s most valuable automaker by a wide margin, and the industry is in the middle of an extremely disruptive transition.
While Tesla was never a subsidiary of another automaker, it did have partnerships with established automakers in the past.
Toyota and Daimler both used to be large investors in the California-based automaker, and Tesla used to produce electric powertrains for them.
Those supply programs were phased out during the first half of the 2010s.
In 2014, Daimler sold its stake in the electric automaker, and Toyota did the same in 2017.
Since then, Tesla hasn’t had any kind of partnership with other automakers other than selling them regulatory credits.
Over the last few years, Tesla’s valuation has surged, and and over the last few months, it rapidly surpassed all other automakers to what is now a valuation of over a half trillion dollars.
Today, CEO Elon Musk received an Axel Springer Award in Germany, and during an interview with CEO Mathias Döpfner, he was asked if it was a serious option to buy an existing automaker.
We are definitely not going to launch a hostile takeover, but if somebody said it would be a good idea to merge with Tesla, we would have this conversation.
The CEO didn’t disclose any ongoing discussion about any merger or acquisition.
Tesla has engaged in many acquisitions in recent years, but most of them were related to manufacturing technology and talent.
I put a low chance of this happening, but financially, it is certainly starting to make sense.
If we look at the top 20 most valuable automakers, Tesla could absorb many of them without massive dilution:
The question is: Would it serve Tesla’s mission to accelerate the advent of electric transportation and sustainable energy?
Personally, I have no idea. Tesla would take control of a large workforce and production capacity, but it would need to convert that capacity to electric vehicle production.
Since the acquisition of Fremont factory, it has been clear that Tesla prefers to build factory and production capacity from the ground up.
So is it truly faster and more efficient to acquire the production capacity, or build it yourself?
I don’t know, but I find the prospect of a potential merger with an established automaker interesting.
What do you think? Let us know in the comment section below.
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