Elon Musk Open To Merging Tesla With Other Automakers
In recent years there have been several mergers and acquisitions in the automotive industry. For example, Stellantis is the new company formed from the merger of Fiat Chrysler America and Peugeot Citroen. Years prior to that, Ford bought and then sold Jaguar, Land Rover, and Aston Martin. So, it is not unusual that merger talk is popping up again. This time it is Elon Musk, the head of Tesla.
Elon Musk is larger than Tesla
If Mr. Musk’s name sounds familiar, it is because he is involved or has been involved in many business ventures, not just in the automotive space. For example, Pay Pal, Space-X, Tesla wall chargers, solar home roofing, underground tunnels, flamethrowers, and even tequila have all been Mr. Musk’s interests. Many of those things he’s applied his hands and mind to have become successful. So, the resultant fans he has attained along his journey have come from many industries. Additionally, his continued successes have meant that investors have been buying Tesla stock, a lot of it.
As the chief motivating entrepreneur behind Tesla, Mr. Musk has faced many challenges to bring his young company to the forefront of the electric car industry. Now that he has done so, many other companies are following his lead into the electric automotive space. In fact, many governments around the world are transitioning their constituency to electric vehicles by passing legislation aimed to phase out internal combustion engine vehicles over the next couple of decades, or sooner. So, the growth of the electric segment, along with Tesla, seems set to grow dramatically.
Tesla’s value leads to speculation
All the attention that Mr. Musk has been able to bring to Tesla and its growth potential have made it a valuable company. It is so valuable that the company is now worth more than many legacy automakers. Stock prices are currently over $500. The strong value has led many to speculate if Mr. Musk will go on a buying spree of other automotive companies.
Interestingly, Tesla merger speculation has not been hidden in backroom conversations. In a recent interview broadcast on the YouTube channel Axel Spring XE, Mr. Musk was questioned directly about the idea of possible future mergers. His response,
“If somebody said, ‘hey, we think it would be a good idea to merge with Tesla,’ we’d certainly have that conversation. But we don’t want it to be a hostile takeover situation.” – Elon Musk
Hypothetical mergers are hypothetical
It is important to note that the conversation Mr. Musk had was based on a purely hypothetical situation. CNBC was quick to point out that Tesla already has many commitments for the money it is making. Building car production facilities, battery production facilities, and mining equipment are costly. So, a purchase or merger of any additional company has to be weighed against Tesla’s overall financial health as it is now and its future needs.
Here is a parting thought. I am just thinking out loud here… Mr. Musk has been successful in bringing Tesla to the top-of-mind-consciousness of consumers interested in electric cars. But, his reach is beyond the automotive space, and Tesla is already nearly twenty years old. So, is it far fetched to think that a merger with another company would be a successful retirement exit strategy for Musk, at least from the automotive space? Doing so would allow him the opportunity to focus on other projects he is involved with, like colonizing the moon or Mars. Then again, a merger could also put him in a stronger position with industry to propel his otherworldly aspirations even quicker. Hypothetical conversations have a way to make a person go, Hmm.