What If Tesla Buys (Insert Automaker Name Here)?
Published on January 12th, 2021 | by Johnna Crider
January 12th, 2021 by Johnna Crider
Before I started writing for CleanTechnica, it was always “(insert automaker name here) will crush Tesla.” Mercedes, BMW, Ford, GM, or whoever. It was the age of concept EVs that were “better” than a Tesla — the age of the “Tesla Killer.”
I think as we move into this next year, we will finally move out of the age of the Tesla killer and into the age of the electric vehicle. Tesla’s success has been dominating the news and has even made Elon Musk the world’s richest person. This success has overshadowed the FUD that many advocates for Tesla, Elon Musk, and electric vehicles were growing weary from fighting.
Today, I noticed a trend that started in December when Elon Musk said he could have the conversation of a friendly takeover if a legacy automaker was interested. Actually, here’s what he said:
“Well, I think we’re definitely not going to launch a hostile takeover. So, I suppose if there was a friendly one, if somebody said, ‘Hey, we think it would be a good idea to merge with Tesla,’ we certainly could have that conversation. But, you know, we don’t want it to be a hostile takeover sort of situation.”
It should be emphasized that Elon Musk and Tesla have zero interest in doing a hostile takeover of any legacy automaker. That’s obvious to me from his statement. His answer sparked a trend of articles from different news and financial news blogs around this topic: What If Tesla Bought (Insert Automaker Name Here)?
The first of these types of articles that I saw and wrote about came from Motley Fool‘s Jason Hall. Hall thought it would be interesting if Tesla was to buy Ford.
“I want to make a proposal to Tesla. This is something that Elon Musk recently said, that he would be listening if approached about discussing merging with another large automaker. I think it’s time that Tesla needs to make a serious concerted effort to buy Ford Motor Company. I know some of you out there are either laughing or going through some version of outrage right now. Your outrage could be because of two very different impressions of Tesla and Ford.”
Hall’s reasoning was that if you really want to change the global auto industry, you need to do it from the inside. It’s a good idea, but I don’t think that would come to pass, especially since the Ford family would have to fully agree to this. I don’t see that happening.
In Reuters, an article noted that Daimler could be Elon Musk’s Time Warner. The article noted that Ford and GM don’t fit Tesla’s vibe of being a luxury vehicle maker, and that VW is out because it’s now “all-in on EVs.” BMW, the article noted, may be Tesla’s fossil-fueled counterpart, but as with Ford, the family would have a lot to say about a takeover.
The article stressed the difficulty of buying any big Japanese company and noted that supercar producers such as Lamborghini could be too niche. Daimler, however, is the world’s top-selling luxury carmaker and its shares have been trailing the STOXX Europe 600 Auto index over the past 5 years.
If Tesla was to acquire Daimler, it could increase Tesla’s global car output, but Tesla would no longer be solely an EV maker — and this latter part goes for any legacy automaker Tesla could acquire unless Tesla acquired it and stopped the production of the fossil fuel vehicles immediately.
Looking Bigger & Broader
The folks over at Driving Canada had a thought about Tesla buying GM and other automakers. Comparing it to a case of “the guppy swallowing the whale,” the article noted that Byran R. Wein, the vice-chairman of the Private Wealth Solutions group at Blackstone, and Joe Zidle, the company’s chief investment strategist, believe they may have figured out Elon Musk’s master plan. They believe that Tesla will buy a major automaker in 2021.
Wien and Zidel put together a list of “Ten Surprises of 2021” — ideas that are defined as “having a better than 50 per cent likelihood of happening.” They put this on the list.
Driving Canada noted that production facilities would have to be redesigned instead of newly constructed but this would enable Elon Musk to be something he’s really good at — Chief Visionary Officer.
The article pointed out that VW would be the logical choice — it has synergy and scale and the commitment to battery electric vehicles. VW is still trying to recover from the Dieselgate scandal and if Tesla was to acquire VW, this could help it fully recover and move forward. Though, this possibility seems very unlikely and impractical when you look at who owns VW, the scale of the company, and the likelihood the company does fine on its own after taking up a leadership role in the EV transition.
The article noted that GM has a lot that people hate about it, including a bloated bureaucracy, tired designs, and “hidebound thinking” — yet it has the most history of electrification, with the EV1 being a great try in another era. Notably, GM would be more amicable for a Tesla takeover than VW due to the majority of its shares being in the hands of institutional investors.
It would be pretty funny if Tesla bought Toyota, especially in light of Toyoda’s recent remarks about EVs and Tesla. Pettiness aside, think about the impacts of an EV maker buying the hybrid leader. Although I don’t think plugin hybrids are a step in the right direction for electrification since they still use fossil fuels, having an EV maker buy Toyota, the article noted, would be a “perfect marriage of Japanese reliability and American ingenuity.”
I doubt that Toyota would be open to the idea of Tesla buying it, especially since Akio Toyoda believes that EVs are overhyped and believes that Tesla is just trading recipes. Overall, it’s an impractical option. It would be poetic if it happened, though.
If Tesla Was To Acquire A Legacy Automaker
If Tesla was to buy out a legacy automaker, I think it would wait until it’s worth $1 trillion or more. Buying one of the top automakers in the world would require a major commitment on Tesla’s part. If that commitment demands for Tesla to stop focusing on its core mission of accelerating the world’s transition to sustainable energy from “outside,” then buying a legacy automaker is not in Tesla’s best interest.
For Tesla to actually do this, it would have to integrate a fossil-fueled-based company and completely reinvent it to meet its goals of sustainability, and this could years. It would be awesome to see Tesla buy GM, Ford, VW, or any other legacy automaker and do this, but it would require a lot of work and funding.
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Selling Teslas in 2012 vs. 2021