Ford or GM to buy Tesla?
 

Analyst: GM will buy Tesla next year. - Leftlanenews.com



Anyone heard anything about this? it is even on USA today, Ford is interested also apparently

Will GM or Ford buy Elon Musk's Tesla in 2014? - USAtoday.com

I really doubt this will happen. I've watched interviews with Elon Musk and he is definitely not about the money and doubt he can be bought out. The whole concept of him creating the Tesla in the first place was to change the way people view cars, that electric vehicles can become a viable form of transportation for the masses. It just doesn't seem like something he would consider from the monetary aspect alone.

Unless he wants to spend more of his time on the SpaceX project and would like another company to manage Tesla, but I still don't think he would sell it.

I doubt he'd sell Tesla, at least not for the foreseeable future. Even before the Model S went into full production and Tesla was down to it's last few million dollars, Elon Musk wasn't contemplating selling to one of the bigger conglomerates.

That said, I'd rather it be sold to Ford than GM. Ford, at least, has a better financial track record and I fear that GM would buy it out solely for the technology and put the brand to pasture.

Not once does he talk about money, only during the Q and A when someone asks him why he doesn't talk about money.

Elon Musk is definitely not about the money, atleast not when it comes to Tesla. In truth he is still a very intelligent business man, so he does factor money into every decision he makes, but when it comes to Tesla his passion for the idea, and goal is so great that he would not let just money dictate what he does with the company.

From another perspective though I could conceivably see him selling off a large portion of the company. Why? Because historically he has started up projects and handed over the reigns either through sale of a large share of the company, or stepping down in terms of day-to-day responsibilities.

While I don't see the sale happening in 2014, I understand why people are predicting a sale.

Also I will throw in here that Elon Musk is a hero of mine. Seriously, the guy is brilliant, well spoken, a great business man, and seems to be a great overall person as well. I had the pleasure of meeting him in the summer and he seemed taken aback I recognized him, and he seemed pretty humble in that brief interaction we had.

I was thinking the same thing, doesn't seem like him to sell the company just for financial purposes.

If he did end up selling I also hope it would be to Ford, GM already mishandled the EV1 so badly it would be a shame for them to screw up Tesla also

There's a pretty good documentary of Elon Musk on netflix I can't remember the name of it though, that's pretty cool that you got to meet him meme

Revenge of the Electric Car, I believe.

That's about the EV1 there might even be a Revenge of the Electric car 2 now? The one on netflix I was talking about is just about Elon Musk its called "risk takers" or something along the lines of that

I really hope they don't buy Tesla. Both GM and Ford would probably ruin it. Tesla is not your typical American car, it has European quality. If GM or Ford bought Tesla, quality would decrease because both GM and Ford are about money, unlike Musk.
Tesla is a publicly traded company, so I think anyone with enough money can buy a controlling stake in the company, given there are enough shares for sale...

In theory it is possible to gain a controlling interest in any company that is publicly traded by snapping up shares, but in practice it is damn near impossible to achieve this. The reason being people inside the company and other investors are going to notice someone snapping up 10's of millions of shares, when that happens it becomes damn near impossible to round up enough shares to take over a company by using that method. The only real way to accomplish this is to negotiate your way in.

Musk owns 30+% of the company. At one point Daimler owned 10% of Tesla and even that large investment was split up amongst a few buyers, I think Daimler now has about 5% of the company.

The other problem is some of the investors that own significant shares support Musk enormously. Which means that if anything were to transpire against Musk's will, he would conceivably be able to purchase their shares to reinforce his own position.

I watch Tesla as a company very closely as I have what I would consider a pretty hefty investment in the company.

could they try to do what Porsche tried to do with their hostile takeover of VW? I mean it didn't work out so well for Porsche, but maybe GM or Ford are willing to try

Ford has a better track record because they didn't get rid of the debt by going backrupt.. now after 2008, their debt is dragging them down.

GM has a clean sheet.

Honestly both companies track record of brand name management are horrible.

I can't sell Musk will sell either way. Unless he can pull a Steve Jobs with Pixar and Disney.. the Jobs family is the largest shareholder of Disney now. I can't see the Ford family will do that either.

The only reason Ford was able to weather the storm better than GM and Chrysler was because of the extra cash generated through the sale of LR and Jag to TataMoCo, and yes you are absolutely correct their current financial situation is certainly not helpful to their end goal of making good cars and generating lots of revenue.

I don't think Tesla would be bought outright. But I can see it entering some sort of joint-venture with large manufacturers to gain access to some manufacturing capacity (while sharing away its electric system).

Musk doesn't need money, but then, he doesn't have enough to make Tesla to reach the economy of scale Tesla requires to become a competitive player in this industry. So, the logic thing to do is using its valuable asset (the electric system Tesla has is the only thing other car manufacturers would be interested) to tap into the production/logistic power of major manufacturers.

If it does happen, it would be a highly leveraged buyout, since Tesla's market cap is $18.5 Billion and GM's is $56 billion and Ford's is $60 billion.

GM and Ford would need to borrow at high interest rates (almost junk bond status or at junk bond rates) to purchase Tesla.

This is hampered additionally by the fact that GM or Ford has to bid at least 20% to 30% more than the share price of Tesla, so the purchase price is more like to become $26 Billion or more (which is almost half the market cap of GM or Ford).

If anything, it will be a "friendly" merger of sorts, rather than a hostile takeover.

And, if it is a merger, what role would Mr. Musk take in the newly merged company?

Will he be content to be subservient to the GM board?

I can safely assume that he definitely don't like to be the pawn in a chess board.

Also, it is too risky for GM or Ford to take such a risk.

There are many alternative fuel technologies out in the market.

Full electric (Tesla) is just one of several right now.

It is not prudent to invest in a company [that uses only fuel tech] that is one-third of your own market-cap.

If GM or Ford buys or merges with Tesla, they are basically saying... "I am placing all my chips on full electric" and I don't care about hybrids, diesel (to an extent), hydrogen, etc."

Also, another point is the... batteries themselves.

Tesla doesn't manufacture the cells/batteries and that is a HUGE part of the electric tech component.

They are sold by Panasonic:
http://www.mercurynews.com/business/...-own-batteries

So, if GM or Ford buys Tesla, they are buying the overall tech that Tesla has developed, not battery factories or production processes.

I don't think it is worth 33% to 50% of the market cap of GM or Ford.

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Now... Tesla is proposing to build and sell a model that is much cheaper than the current Model S...

http://en.wikipedia.org/wiki/Tesla_BlueStar
The entire premise is based on the cost of the battery cell cost, which Tesla does not produce (but buys from Panasonic or other suppliers).

This "proposed" new lower-cost car is just that: a proposal.

It does sound very profitable (and enticing to GM or Ford) if this new proposed car sells in the low 100s of thousands... but until Tesla actually start development and production on such a car, Tesla's current lineup is only the Model S and the upcoming Model X SUV.

TSLA: Summary for Tesla Motors, Inc.- Yahoo! Canada Finance

GM: Summary for General Motors Company Common S- Yahoo! Canada Finance

F: Summary for Ford Motor Company Common Stock- Yahoo! Canada Finance

Even if one of the Big 5 buys Tesla out, the bottle neck is still at the Panasonic factories (here is an article of how the battery essentially saved Panasonic's bacon). Honestly I bet on Panasonic over Tesla a year ago because the stock was dirt cheap.

The issue back when Tesla was started was Musk had to make a pure electric car because that's the only way he could have gotten in and make a difference to the car industry without having going through the traditional car manufacturing model. Unfortunately scaling up turns out to burn a lot more cash than he had envisioned. He basically found out to fundamentally change the game is a lot harder than he thought.

The issue now is all the big OEM designers Bosch, Continental and Siemens have their hand on their own battery charging and discharge algorithms.. The issue is they can't get enough batteries for the volumes they want, heavier the car the more batteries they need that's why BMW comes out with the i series that is built out of CF. Even the supercap tech is dominated by Panasonic formerly Sanyo.

The other big huge tech that hasn't been absorbed is William's KERS system that was tested in Porsche, Jaguars etc.. that is something that has potential.

GM screwed themselves on battery tech.. eg here.