Elon Musk Would Consider Having Tesla Acquire a Legacy Automaker (techcrunch.com) 111
Elon Musk would consider leveraging Tesla's mega $554 billion market cap to buy a legacy automaker, but only if it was on friendly terms, the billionaire entrepreneur said Tuesday in a wide-ranging interview with Axel Springer CEO Mathias Dopfner. From a report: Musk, who received an award Tuesday from the media giant, discussed his various interests and businesses, notably SpaceX and Tesla, both of which he leads. Dopfner noted that Tesla's valuation far exceeds the market cap of incumbent automakers like BMW, Daimler and VW, which along with others in the industry once dismissed Musk's ability to make electric vehicles mainstream. When asked if it would be a serious option to buy one of the legacy automakers, Musk said it was possible, but only under certain conditions. "Well, I think we're definitely not going to launch a hostile takeover," Musk said. "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." Tesla today sits in an enviable position -- although Musk said once again that its share price is too high. The company, which will join the S&P 500 Index on December 21, is now the most valuable automaker in the world, surpassing rivals that produce far more vehicles annually.
Yes, if everything is perfect, then maybe. (Score:5, Insightful)
I don't know why the media is jumping on this story. It's not really new information. Yeah, if there was a perfect fit with another company, then Tesla would consider the deal.
No duh.
But honestly, I can't think of anything legacy automakers would have to offer Tesla now other than liabilities and legacy corporate problems.
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But honestly, I can't think of anything legacy automakers would have to offer Tesla now other than liabilities and legacy corporate problems.
Existing manufacturing plants, and trained workers.
Union (Score:4, Insightful)
And existing pension and health care liabilities, unbreakable union contracts, and dealership contracts protected by franchise laws drafted by the dealerships.
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None of which would survive an acquisition. The way it would work would be, for example, GM would sell all of its profitable assets to Tesla for a huge pile of cash. It would use this pile of cash as an asset to package with the long-term liabilities to be sold to hedge funds. The new hedge fund owners would immediately declare bankruptcy, dispensing with all unfunded liabilities (like pensions and retiree benefits), using the cash to pay secured liabilities, and keeping the rest.
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LOL What a beautiful system. Where are the American politicians who are against it?
Re: Union (Score:2)
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I feel like selling yourself to explicitly exclude retired worker pensions and benefits and then declaring bankruptcy to renege on the promises to those workers should draw rather intense scrutiny.
It's a good reason why corporations shouldn't be managing retirement and health benefits for employees, but until that whole mess gets fixed, companies need to be held accountable for their obligations that they promised.
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It's a good reason why corporations shouldn't be managing retirement and health benefits for employees, but until that whole mess gets fixed, companies need to be held accountable for their obligations that they promised.
Well, to some degree they aren't. Social Security is indeed a government managed pension plan. It doesn't pay all that much but it does pay enough to get by if you lead a rather simple life.
Corporate funded retirement plans are essentially just extras on top of SS (that often eclipse it in value). Honestly I think they need to make it so that you can voluntarily contribute more to SS (but with the current rate still set as a minimum) if you want to result in a larger monthly income at retirement.
As it is
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They are called out as socialists or communists for wanting consumer protections. Some states have written specific laws in order to discriminate against Tesla. Ford and GM cried big crocodile tears because Tesla sells cars directly to consumers without going through a dealership.
Re:Union (Score:5, Insightful)
Dealerships are parasites. They add no value and just put friction into the process of buying a car. Dealerships make no sense in the modern world.
Instead of complaining about Tesla selling direct, the legacy car companies should move to the same business model, at least in the states where it is legal.
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At least with a dealer you can see the actual car you're going to purchase before signing. Not so with Tesla, once the payment is made online they can jam you with any factory defect they want (or even a preowned car) before you see it.
https://www.theverge.com/2018/... [theverge.com]
https://insideevs.com/news/434... [insideevs.com]
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Just what Michael Dell said about computer "dealerships" over 30 years ago, yet not only do they still exist but Apple runs their own network of them. Seems like not only do they "make sense" beyond the "friction" the put "into the process", but buyers often prefer those "parasites".
But hey, good talking point, and if you're gonna lie, lie big.
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I get the feeling you outright don't understand the difference between a dealership and a store. Just checked yep I can buy from Apple direct.
But hey, good talking point
Yes it was, it's a shame you didn't understand it.
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Yeah the dealership model really needs to go. It basically is just legislation to make it legally mandated that a middle man gets his palms greased when selling a car.
It's particularly funny when people still try to apply that to industries outside of automobiles. I've been to a shops (be it car, computer, etc) and asked if they had something and the response was a chipper "Not here at the store, but I can get it for you!". No thanks buddy. I can order it from Amazon myself . . .
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Nowhere to be found because most of them get massive kickbacks from this separation of contracted relationships through acquisitions and questionable maneuvering between "entities" that are all just business units owned by the same people. Bain Capital is infamous for doing shit like this and they've been doing it for decades without consequence.
Re: Union (Score:1)
You canâ(TM)t discharge pension liabilities in bankruptcy, whoever acquired the company needs to take them.
Hence why GM, HP and the Post Office, amongst others, are drowning in debt and totally unattractive to investors. They are continuously on some bailout scheme (whether direct or indirect) since the politicians need them to maintain these liabilities so the pensioners donâ(TM)t vote against them.
Itâ(TM)s also why most companies choose a third party 401k administrator, that way they don
Re:Union (Score:5, Insightful)
Any takeover or merger is always going to come with liabilities. But gaining manufacturing assets, engineering and assembly expertise, not to mention the aforementioned dealership relationships, could be to Tesla's advantage. As with any such deal, the pros and cons would have to be weighed, and would effect either the decision to buy or enter some other arrangement with an automaker, or would effect the buying price. That's what company valuations are usually about, gaining some real knowledge of what the assets are, what the long term liabilities are, and whether downstream contracts would effect Tesla's ability to run the business as they so choose.
Re:Union (Score:4, Insightful)
Those all sound like cons to me. Tesla can organically grow its manufacturing capability by leveraging it's fat valuation multiple in the capital markets. Why invest in old tech when you can build a state-of-the-art production facility? Engineering and assembly expertise? They seem to be doing fine for such a new entrant to the sector. Why "invest" in bad habits when you can examine status quo process, ignore or improve upon it, and streamline things? Dealer relationships? Are you kidding me? Ask most car buyers what they hate most about the car buying and maintenance process. It's the lame dealer network that adds little to no value while adding aggravation and cost. That model is eventually going to die. Manufacturer direct makes a LOT more sense.
Disruption is harder than it looks (Score:5, Insightful)
Engineering and assembly expertise? They seem to be doing fine for such a new entrant to the sector. Why "invest" in bad habits when you can examine status quo process, ignore or improve upon it, and streamline things?
You know that Silicon Valley startup distruptor culture is a myth, right? You can't make a product, like a Tesla, by throwing smart brains and money at a problem. A Toyota is a good car due to generations of refinements and lots of built up expertise. Even Musk has admitted many missteps, people at Toyota, Ford, or Honda could have told him right away. You need innovation, but you also need designs that have had 1000 iterations to perfect...something the brightest MIT has to offer cannot possibly anticipate and few elite brains have the patience to fulfill. Making a good product as complex as a car is boring refinement over many generations. Few in Silicon Valley have the patience to really refine a complex product.
Don't get me wrong, Tesla is a HUGE success. They are great at innovation and marketing and from what I can tell, even make a great car. However, I bet they could make even better cars at a lower cost if they had some expertise and supply chain assets they could get by acquiring an experienced automaker.
In my mind, a successful complex product balances between innovation and efficiency/refinement. Innovation is very sexy and inspires us and makes great news. However, those who refine working designs and find ways to make individual parts 5% better or more reliable are an undervalued critical feature to success. The innovation inspires the sale. The refinement ensures you can actually drive the car 5 years after it is purchased without sending it in for repairs every 2 months. I think Tesla could gain a lot by merging with a legacy carmaker. I am very personally fond of the Japanese ones. They would benefit from Tesla's innovation, Tesla would benefit from their efficiency.
Re:Disruption is harder than it looks (Score:4, Informative)
I had a coworker that had a Tesla. Not one of the myriad of Teslas that have been reported that took some 'inventive' shortcut to get built when one part or another ran out, but a pretty good representation of Tesla as it was meant to be built.
Well one, if it rained, he couldn't open his trunk without water pouring into the trunk. A design mistake where they failed to account for water flowing off the trunk lid while opening. The sort of thing that is amatuer hour for a 'traditional' car maker.
His keyless experience also felt sub par. Tesla did a lot more to enable a boring 'normal' bluetooth phone to unlock car rather than doing something weird like onstar, but on the flip side it sucked compared to a dedicated keyfob, and the dedicated keyfob had to be held up to the B pillar when everyone else with a car in that price range and comparable features could leave it in the pocket.
In general, he appreciated select areas where Tesla pushed the envelope in ways competitors had not, but got frustrated with the onslaught of little things that he took for granted that Tesla got wrong.
All that said, while I recognize the *potential* to having a legacy carmaker fill in the blanks to get the 'boring stuff' right more, if they could acquire, it's probably more effective to acquire the individuals by poaching employees rather than the whole. Ultimately though I am guessing Tesla culture probably may have a bit too much hubris to listen to an 'outside expert', so it may be for naught.
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Right, and the clock is ticking on Tesla to learn how to make an entire car minus a great drivetrain as other manufacturers are poised to enter the market with great cars but with unproven electric drivetrains. Tesla has not yet been tested and acts like it. Funny thing is, an electric drivetrain is far simpler to do that modern ICE drivetrains.
Re:Disruption is harder than it looks (Score:5, Interesting)
Even Musk has admitted many missteps, people at Toyota, Ford, or Honda could have told him right away.
Of course, but they also would have introduce the sort of thinking that would hold Tesla back in other areas. It isn't like the influence of those voices could be limited to just good things, they were part of why the companies they came aren't able to compete in the EV market and they would contaminate Tesla similarly.
You cite Toyota as an example. Toyota is very careful about hiring from other auto makers because they run their business so differently and the Toyota Production System requires thinking that is pretty much opposite of what Ford does. At Ford you'd never slow a production line until you literally ran out of room to store cars, because they are trying to spread fixed costs over the largest number of units to make the factory look good. At Toyota it is normal to slow down the line during the day if takt time drops and producing in excess of that, while it makes the factory's books look good, is bad for the overall business.
I once interviewed a candidate who worked in product development for a large printer company. I was hoping he would surprise me, but although he was technically very capable his thinking was clearly of the sort that produces the biggest piece of trash poorly thought out garbage hardware in the technology business. I didn't hire him because I didn't want that kind of thinking to contaminate the rest of the team.
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"Of course, but they also would have introduce the sort of thinking that would hold Tesla back in other areas. "
Well, that's what Musk said when he refused to consider anyone with an automotive background, and now he can't make body panels fit together. Just because he said it doesn't make it so.
"I once interviewed a candidate who worked in product development for a large printer company. I was hoping he would surprise me, but although he was technically very capable his thinking was clearly of the sort th
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now he can't make body panels fit together.
Yes, there are instances of Tesla body panel fit being poor. But then, Ford shortly ago recalled more than 2 million vehicles because the door latches don't work and the doors pop open while driving down the road, something the bright minds you are suggesting have had more than 100 years to figure out.
We could go back and forth like this, but you'll run out of examples long before I do.
Re: Union (Score:1)
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Yeah, I can honestly say that I avoid the dealership like the plague unless its a warranty issue. They'll quote 3x-4x what an independent repair shop does and 8 to 10x what a local part-time mechanic (eg, "I know a guy that can do it") would.
That said, internal combustion cars are a technology that is well matured and most independent mechanics understand it pretty well. A Tesla is more akin to a giant motorized smartphone with wheels - most car places aren't going to have any clue how to work on it.
Elon Musk disagrees with you (Score:1)
> Tesla can organically grow its manufacturing capability by leveraging it's fat valuation multiple
Elon Musk has said that trying to transition from an R&D company, coming up with ideas for cars, to instead be a manufacturing actually producing millions of cars, has been "hell". He's not been at all shy about telling anyone who will listen that Tesla sucks at building cars. Coming up with cool ideas is what they are good at, and PR. Manufacturing - not so much.
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Right, but the problem there is Musk himself, and any acquisition, in order to be a "perfect fit", would result in Musk destroying the value he most urgently needs.
Companies take on the personalities and values of their leader. Tesla would not become BMW by acquiring BMW, it would cause BMW to suffer instead.
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Mr. Musk is certainly a unique character. With both strengths and weakenesses, of course, but he's not going to fit in well with most organizations.
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" Engineering and assembly expertise? They seem to be doing fine for such a new entrant to the sector."
Are they? How good might they be doing if they could make a quality car? How good a quality car could they make if they considered learning from others with experience?
A car is a lot more than a novel electric drivetrain. Tesla is doing well because it has had a market to itself while it learns how to actually make a car. How many other makers have their car's roofs blow off after delivery?
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Any takeover or merger is always going to come with liabilities. But gaining manufacturing assets, engineering and assembly expertise, not to mention the aforementioned dealership relationships, could be to Tesla's advantage.
Doubtful. All this would come with the huge liability of inflexible, sluggish, resistant to change legay automaker methods that would poison Tesla rather than enhance it.
Tesla got where it is by starting from scratch, unencumbered by 100 years of evolution and legacy that has rotten automakers’s organizations with lots of leftover crud that can only gum up the works.
No, the best way to go would be for Tesla to license it’s tech, and that would greatly diversify the offer of EVs, futhering the
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inflexible, sluggish, resistant to change legay automaker
I rather doubt he would consider a US automaker anyway. Tesla is not the only new kid on the block, there are new-ish automakers in India, China and South Korea that would be pretty good partners, and some eastern European companies that wouldn't be bad if as part of the agreement they just paid all the management staff to go away.
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What "tech" would it license, and why would that be of irresistible value to the industry?
Ask Texas Instruments how becoming a licenser of "tech" has supported their continued leadership.
It will be far easier for legacy makers to develop what Tesla has done well than it will be for Tesla to learn how to make good cars at scale.
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1980 called, they want their scare tactics back
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Well, it sure sounds like AOL buying Time Warner all over again...
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This.
And you're the only other person to notice.
I don't see the gains to *either* side for Tesla and a legacy maker to merge.
Tesla gets burdened with ancient plants, assorted liabilities, and UAW contracts to which normal bankruptcy rules don't even apply, as well as UAW work rules and such
Legacy shareholders would be fools to not see themselves as playing Time Warner to the upstart, with relatively small production and capital assets compared to its own, but which whose current shareholders have a massive
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and lot's of cars to lock into dealer only oil changes and other services.
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If you want to "offload" your Ferrari at a "good price", it doesn't need oil changes because you can't get a "good price" on a Ferrari that has miles on it.
But I'm sure you know that, AC. I bet you bargain shop between McLarens and Ferraris every day.
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The existing manufacturing plants, are designed for ICE cars not electric. While Tesla may benefit from some of the body work processes, much of the manufacturing is rather different. Also with the Trained workers, Tesla will also inherit UAW Union with them, where at this stage of Tesla Growth, a Union may kill the company as Tesla wants to do things differently, while the UAW wants to do things the same way, as they always did.
While an electric car looks a lot like an ICE Car, They are extremely diffe
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Existing manufacturing plants, and trained workers.
Yes, workers "trained" in ineffective, sluggish traditionnal automaker methods What could possibly go wrong?
No, Tesla should instead look into licensing it’s technology.
Re:Yes, if everything is perfect, then maybe. (Score:4, Insightful)
It is the opposite, actually. There is nothing a boutique outfit with ginormously overpriced stock can offer to an established and profitable automaker which makes a significant number of cars. Because what Musk can offer is not real money, but Tesla stock.
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I think that you are talking about Nikola and the deal that GM is trying to get out of with them
Tesla, on the other hand, has active production lines and has locked down access to batteries, with more being built
Morgan Motor Company (Score:2)
Elon ! :)
buy Morgan Motor Company.
We'll like to see how will you add batteries and autopilot to a manually built car with a wooden frame
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You build the wooden frame on top of the Electric Skate board.
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Then after any major car crash -> Lithium fire but now with a hardwood smoke aroma.
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not quite what he said (Score:1)
not quite what he said
Still not mainstream (Score:3)
Musk did not make electric vehicles mainstream. He made them desirable, aspirational, playthings for the rich. That is not the same thing as practical and affordable which is what you need to be mainstream. GM, Nissan and Hyundai are all doing way more on that front.
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I'm not quite sure why you're saying that, except that maybe possibly in the future GM, Nissan and Hyundai are going to do something to make EVs more mainstream. There's a difference between EVs and Hybrids. Tesla wildly outsells all other EVs in the US. They've accounted for over 80% of the EV sold in the US for the first half of 2020. If GM, Nissan and Hyundai are "doing way more on that front" to make EVs mainstream, then why aren't they actually selling real physical EVs, in particular vastly outselling
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GM, Nissan and Hyundai are all doing way more on that front.
They are doing absolutely nothing on the EV front. They are making some hybrids, but that is mostly to keep their fleetwide fuel economy up enough that it doesn't bottleneck sales of their large IC only boutique vehicles, which are very high margin. The E portion of those hybrids won't get you much further than around the block.
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The Nisan Leaf is a full electric car, and it is on market since a decade.
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Merge Tech (Score:2, Insightful)
Musk is saying he wants to merge his tech with other automotive produces but more so it's key this relative partnership depends on those groups wanting to embrace the future he envisions.
Musk is kind of a pot smoking hippy while also still being the entrapenuer who has the greatest vision for the future of humanity. It's a really challenging thing to describe. Is the guy just high or does he actually believe humanity can evolve past its current limitations...
Either way, if I could be one of the first to liv
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Is Tesla's tech really that valuable people would want to buy it? Correct me if I'm wrong, but the battery tech is owned by Panasonic and the battery factories (A) Sell to anyone and (B) are co-owned by Panasonic and Tesla. The self-driving tech seems fine, I guess. I have a tendency to dismiss it because I'm not a fan of the surveillance that requires so I personally don't want it. But that seems like a function of accumulated miles, and therefore any company producing millions of cars per year could g
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I mean, I hear they are a two years more advanced on various EV stuff, but is two years really that big a difference?
Yes, yes it is. This can be the difference to being the dominate holder of a market and being left picking up the scraps. Likewise 2 years advantage is not a universal concept. This is kind of like the mythical man-month. You could say an EV start-up would take 2 years to get to the position that Tesla is at which seems optimistic but that's a completely different thing than saying GM could. In the latter case you have momentum and infrastructures. These things would not be as scrappy or gungho as the start
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In software, with 0 costs to deploy and 0 lag to deploy, 2 years is a lifetime. In hardware, it's significantly less true (look at phone specs over the years). In cars? I cannot tell the difference between a 2018 and a 2020 car.
The number came from either VW or Toyota engineers tearing apart a Tesla. They were talking about how long it would take to get them to catch up. Which means.... in 2 years there could be tens of millions of competitors rolling out the door and Tesla still has to break the milli
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Is the guy just high or does he actually believe humanity can evolve past its current limitations...
Definitely the latter, check out Neuralink if you haven't read about it. https://neuralink.com/ [neuralink.com] .
The Singularity is coming . .
I would gladly accept the the one way ticket.
Hell, I'd settle for one-way to the Moon, we need to go there first anyway.
Prompted question - not really his aim (Score:5, Informative)
In other words, news story out of nothing.
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Say goodbye to "the press", and hello to "the media".
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It's the sort of question that would be utterly stupid to say 'we absolutely will' or 'absolutely won't'. There's nothing to be gained by categorically claiming either way.
No, that would be disastrous. (Score:2)
Tesla’s success comes from starting from scratch. All legacy automakers are encumbered by evolutive crud that prevents them from being nimble like Tesla is. Merging with a legacy automaker would totally let that crud gum up the works in Tesla, and Tesla would become an ineffective, slow-moving, sluggish automaker.
Tesla should instead look into licensing it’s technology with other auto makers, that would greatly di
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Come on, you know you want a Tesla Yugo.
(It stalls before auto-drive has a chance to crash.)
On target (Score:2)
On the other hand, it's ludicrous for Tesla's valuation to be higher than Toyotas. That's just plain crazy.
MATH: it's not the number of cars (Score:2)
Telsa aimed for the profitable segments. FORD makes maybe $1000 on a cheap car that costs a lot upfront to mass produce at those prices and any recalls etc can destroy that margin. Then you take a Tesla with massive profits, not only for the segment but higher due to their brand name / fashion and they have fewer and cheaper bug fixes avoiding costly recalls.
It's foolish to think that will hold as they grow to scale as most cars are the low margin cheap cars... but they are possibly going to lead in other
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If you'd said "Toyota" or "Nissan" or "Kia" or "VW" you would have been right. US auto manufacturers got out of the economy car biz a while ago.
probably correct (Score:2)
I read long ago about how ford might get out of the economy cars; wouldn't surprise me if they did and I only incidentally hear about car news. What I learned is that it's a low margin high risk business far worse than I ever imagined and I remember Ford as as the company because it was ironic that Ford would be the one running away from affordable car production. Time goes bye so fast it could have been a decade ago for all I know.
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I owned a Saturn for a while. The engine got decent mileage but was junk. It burned a oil quart of oil per tank of gas.
Fisker would have been good (Score:2)
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They were plug-in hybrids, not "all electric."
They had a 2.0L ecotec and managed 20mpg (LOL) when running on gas .
Ugh.. (Score:4, Insightful)
Musk is no ally to the common laborer and is openly against organized labor. That may seem obvious since he's the one dolling out the dough but typically people recognize a piece of shit when they see one at these top positions. When Musk is long gone, I have no idea if it'll leave a vacant, unfillable hole for his companies like Steve Jobs did twice. But I do know, other companies will continue to innovate and turn out products people want with or without these cult worshiped entities.
My suggestion - don't buy Fiat Chrysler (Score:2)
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Chrysler seems a good fit being owned by Italians. Nobody ever buys an Italian car for reliability.
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So that is difficult to happen, because one of the PSA owner is the France.
Another point is that Tesla are very premium cars, in FCA terms they're like the Maserati brand, not the Fiat brand that has some cheaper electric cars [fiat.co.uk] they are more expensive compared to the same LPG or petrol models. Same thing for Peugeot. The lesson Teesla made is that was better to build an eclectic premium car instead of making a cheap one. Fiat did the Panda Elettra [formulapassion.it] in 1990, but due the bat
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Chrysler doesn't exist any more as an independent company and the CEO of the company that is in the process of acquiring FCA (Fiat Chrysler) just announced aggressive plans to electrify its range:
https://europe.autonews.com/ar... [autonews.com]
legacy automaker (Score:3)
That's Subaru isn't it?
Good and bad. (Score:3, Funny)
Okay, this COULD be a good thing from a build quality and engineering standpoint.
Right now, Tesla's system of building cars is semi-random and wholly asinine. Umpty-jillion different fasteners, tons and tons of small parts that could be unified into simple, larger assemblies.
They can shrink the time it takes to build, shrink the cost to manufacture and lead to better tolerances (panel gaps, etc) on the end product.
End effect?
1: The company makes more per-car
2: The price comes down
3: By splitting the cost savings, they could actually do BOTH.
The downside is going to be culture clash.
Tesla has a very Apple-like "not invented here" mentality.
This will cause problems with integrating the companies.
Also, it'll muddy the maverick cachet it has with fans while poisoning relationships with other major auto manufacturers.
Hear this out: (Score:2)
If I'm not mistaken, They could probably get a pretty good deal on Packard. [packardmotorcar.com] That's certainly legacy, and may not be exactly what the article is looking for, but I think it could be leveraged quite wisely.
Considering the unconfirmed association of Nikola Tesla with a Cosmically Powered Packard (but others believed to be a Pierce-Arrow [jalopnik.com]), I think it would be an ideal buy. Imagine a bunch electric Packards, based on the looks of old Packards running around. I wouldn't mind a limo based on that....
By friendly what he really means.... (Score:2)
Is no union.
Potential For Brand Poisoning (Score:2)
Revive Pontiac (Score:2)
I want an electric Firebird.
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I want an electric VW Sirocco. Most delightful car that I've ever driven and looked really hot, but the engine left a bit to be desired (although it was nicely designed to be really easy to work on).
Chrysler is worth buying for the bodies... (Score:1)
They have nice body designs. The car innards aren't great but that wouldn't matter for an all-electric reprint of some beloved 8mpg classics. You could keep or scrap their entire staff. Keep them if you want just don't actually let them interfere with the real work.
Buying a legacy OEM (Score:2)
It seems to me, as an employee of a legacy OEM, that is would be a bad move by Tesla. Integrating the two companies in a worthwhile fashion would absorb a great deal of time and management effort. Personally, I'd recommend they set up a proper product development section, and manufacturing section, with real teeth, and then just go and buy every book that has been written about the Toyota Production System, and do what the books say.
Renault (Score:2)
I, for one, welcome our new electric Twingo overlords.
DeLorean, please! (Score:1)
I'd love to see Tesla's take on a DeLorean.
(Time-travel auto-drive, what could possible go wrong?)
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What Tesla has is a valuable technology and the manufacturing know how. The reason it's valuations are so high is not because of today's profits, but rather that as an ever-growing number of jurisdictions start to put in place low to zero emissions policies over the next couple of decades, that Tesla is far better positioned to fill that growing market for EVs than any other auto manufacturer on the planet.
Now maybe the valuators, speculators and the like are all wrong, but all things considered, I'd say Te
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The proof is in the pudding. They have the facilities where other auto manufacturers in North America, Japan and Europe are trying to play catch up.
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Tesla had already sold 318,350 cars by the end of Q3. For them to sell only 370k cars for the year would require them to sell only 51,650 cars in Q4, which would be lower than any quarter since Q2 of 2018. Given that they had a record quarter last quarter, selling 139,300 cars, that seems highly unlikely.
I suspect that they'll deliver between 120k and 140k in Q4, but then again, they might just limit their deliveries to 101,650 to make it an even 420k. :-)
Either way, growth has not stalled. They're sell
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To flesh out with some data:
Ford sells about a million trucks a year in the US alone. Overall Ford sells more than 5 million cars a year globally.
Toyota sells about 10 million cars a year globally.
Tesla has lit a fire under competitors on various fronts, but it's a questionable bet to claim that other manufacturers *can't* bring their A game to compete with.
Yes, the auto industry was stagnant on a lot of fronts, because despite competition the long standing players they had largely shrugged on a lot of fron
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To flesh out with some data: Ford sells about a million trucks a year in the US alone. Overall Ford sells more than 5 million cars a year globally. Toyota sells about 10 million cars a year globally.
Now let's put that into the proper perspective. Tesla sells four models of vehicle in total. Two of which are priced in luxury brand territory (and sell pretty well compared with other luxury brands, but they're noise overall). A third is still ramping up. You can't compare Tesla's total sales against those of other companies' entire lineups, because you're basically comparing 1.75 different models against dozens of models.
The model 3 at various points this year has been the 7th best selling car in the
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Now let's put that into the proper perspective. Tesla sells four models of vehicle in total.
While this may explain lower volumes, we are talking about market valuation. Among the things that carry value is having a broad addressable market through having already implemented a wide variety of models. It may be understandable that they can't compete so well with so fewer models, but the fact that they have so few models to field is part of the problem. I didn't call it a 'minor player', but it's valuation would be suggestive of a behemoth that dwarfs all other players in the market. It's valuation o
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Explaining the valuation is simple. Valuation is based on expectation of future profits. The ICE automakers are laden with huge future liability because of pensions, a dealer network, etc. For each car GM sold in 2018, GM made less than $1,300. Tesla is bringing in over $3,000 per car, and they're still able to move the product easily. If you scale up Tesla to have a similar number of vehicle lines as legacy automakers, they will absolutely wipe the floor with them profit-wise.
And Tesla has more compet
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It is interesting to note the blurb for this thread did not mention what else Musk said [cnn.com]. He said the stock price is due to investor expectations of future profits rather than recent results:
"If, at any point, they conclude that's not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!" he wrote in the email, which was first reported by Electrek. Tesla did not respond to a request for comment about the email. Musk also told employees they need to cut costs, citing the company's profit margin of 1%.
Re:Tesla + GM = Match Made in Heaven (Score:5, Insightful)
The difference being that Tesla repaid in full the whole DOE loan (the only one it received) in 2013 - 9 years before the term.
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And even if they didn't, that would be okay. Governments have two levers to enact policy: financial and regulatory/legal. There's nothing wrong with using tax payer dollars to push fund development of a market in a taxpayer friendly way. The benefit of clean air to people is right up there with the benefit of not having polluted water, having functional sewage system, and roads that don't fall apart as you walk on them.