
Will GM or Ford buy Elon Musk's Tesla in 2014? - deadfall
http://www.usatoday.com/story/money/cars/2013/12/26/gm-ford-tesla/4208273/
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apsec112
Buy it with what? GM and Ford have market caps of $60B. Tesla has a market cap
of $20B. It couldn't be an acquisition, it would have to be a merger. A merger
would:

\- put Elon Musk de facto in control of Ford/GM, as by far the largest
shareholder;

\- give people who are now holding big chunks of Tesla stock big chunks of
Ford/GM stock.

I can't imagine Ford/GM being happy about #1, and I can't imagine Tesla
shareholders (including Elon) being happy about #2.

~~~
ZachPruckowski
Tesla's P/E ratio is literally 1000-1[A]. Most of that market cap of $20B is
based on expectations that Tesla is going to have hockey-stick growth rates
over the next 5-10 years. So in order to keep that stock price, they need to
go gangbusters - "we sold more cars than last year" is bad news for them
because investors are counting on them to like double or triple sales. A
sustained anti-Tesla campaign (which you'll notice is already underway)
combined with a few minor setbacks could cause some big stock price losses and
make Tesla a more attractive buy.

Personally though, I don't think it's that likely that Tesla will be acquired
in the near term. The only reason the article gives is "GM sucks at making
electric cars for consumers" and buying Tesla would help GM solve that
problem. But the fact is that Tesla hasn't yet solved the real problem either
- they can build kickass electric sports cars and luxury sedans, but that
doesn't necessarily translate into a viable consumer car. Ford and GM have
tried selling consumer-model electrics and they've failed because of budget -
when you try to build an electric car with today's tech for $30K (the average
US new car price) you wind up having to make a lot of compromises, even
accounting for the generous tax credit. Ford and GM are building inadequate
electric cars at roughly the $30K pricepoint, while Tesla's building a great
electric car at twice the price. Tesla's doing a lot of clever engineering and
making good cars, but it's not really clear to me that "cut the Model S's
price in half" is so much easier than "make the Volt/Leaf/etc. not suck" to
justify a buyout/merger.

[A] - Stock price divided by this quarter's project earnings per share.

~~~
revelation
As usual, you can't take new technology and expect to instantly engineer it
into a mass-market solution, and it certainly won't work if you then do a
half-assed job. That, frankly, has been GM and others approach to electric
cars.

Tesla is eating up a large part of the global lithium production and is
contracting with Panasonic and others to source massive numbers of custom
batteries. Panasonic then goes and builds factories, a supply chain, etc. The
massive scale here is what will drive cost reductions across the board. Some
estimates are that Tesla is already only paying 100$/kWh of raw battery
capacity.

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Havoc
I doubt that very much. I don't think Musk is interested in a pile of cash
anymore - he's already got more than he'll ever need. Changing the world seems
to be his current game plan.

The only way I see him selling is if he feels the cash might help him get the
hyperloop off the ground - the hyperloop and tesla seem to be linked though so
I still think its unlikely.

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alexgaribay
I do not see this happening. One of the main reasons Musk created Tesla was to
remove the middleman, that being dealerships, and to be able to sell directly
to the customer. If that buyout were to happen, that would completely
contradict that main principle of Tesla.

EDIT: At the time of my comment, I forgot about the legalities of buying
publicly traded companies. It's something I don't particularly follow.

~~~
polarix
Wait, principle? How does that have anything to do with whether this happens?
Tesla is a public company.

edit: per [http://www.businessinsider.com/elon-musk-
borrows-150-million...](http://www.businessinsider.com/elon-musk-
borrows-150-million-to-buy-tesla-2013-5) it looks like Musk, holding 65%,
would be able to block any hostile acquisition.

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Akujin
Tesla has the potential to be GM. I think Musk knows that.

In 10 years the 30k USD electric sedan will be affordable and everyone will
want one because it will be safer, faster 0-60, cheaper to maintain, and
cheaper to charge than a comparable gasoline sedan.

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codecrusade
Form and GM would need Tesla(technology, talent). But does Tesla need Ford or
GM(diffused operations, liabilities,redundancies, old generation talent)?
Nope- Therefore unlikely

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argumentum
Don't see it happening, just based on Musk's personality and his strong
control of the company/board.

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lazyjones
Google will buy it and build a self-driving, electric car... I do hope that
Elon Musk keeps Tesla though.

