Gary Zhou 
Estimated reading time: 6 minutes
It was always (insert automaker name here) would 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.”
When we head into next year, I think we’re actually going to move out of the Tesla killer age and into the electric vehicle age. The performance of Tesla has dominated the news and has also made Elon Musk the richest person in the world. This performance overshadowed the FUD that many Tesla, Elon Musk, and electric vehicle proponents were getting tired of battling.
Today, when Elon Musk said he might have a friendly takeover conversation if a legacy automaker was interested, I noticed a pattern that began in December. Here’s what he really 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 stressed that Elon Musk and Tesla have no interest in taking over any legacy automaker in an aggressive way. His reply sparked a trend of articles on this subject from various news and financial news blogs: What If Tesla Bought (Insert Automaker Name Here)?
Ford
The first of these types of articles 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 point was that you need to do it from the inside if you really want to change the global automotive industry. It’s a good idea, but I don’t think it’s going to happen, especially because this would have to be completely agreed to by the Ford family. This is not very likely.
Daimler
In Reuters, an article noted that Daimler may be the Time Warner of Elon Musk. The article noted that Ford and GM may not fit the vibe of Tesla being a luxury vehicle manufacturer, and that VW is out because it is now “all-in on EVs.” BMW, the article reported, may be the fossil-fueled equivalent of Tesla, but the family will have a lot to say about a takeover, as with Ford.
The article stressed the challenge of buying any major Japanese business and noted that it may be too niche for supercar manufacturers such as Lamborghini. Daimler, however, is the top-selling luxury carmaker in the world and over the past 5 years its shares have been trailing the STOXX Europe 600 Auto index.
It could increase Tesla’s global car performance if Tesla were to acquire Daimler, but Tesla would no longer be exclusively an EV producer, and this latter portion goes to every legacy automaker Tesla could acquire unless Tesla acquired it and immediately stopped the production of fossil fuel cars.
Looking Beyond
The people over at Driving Canada were thinking about purchasing GM and other automakers from Tesla. The article noted that Byran R. Wein, the vice-chairman of the Private Wealth Solutions group at Blackstone, and Joe Zidle, the chief investment strategist of the company, believe that they may have figured out Elon Musk’s master plan, comparing it to a case of “the guppy swallowing the whale.” They expect that a big automaker will be acquired by Tesla 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 instead of newly built, production facilities would need to be redesigned, but this would allow Elon Musk to be something he’s very good at—Chief Visionary Officer.
Volkswagen
The article pointed out that VW will be the logical alternative — it has synergy and size and the dedication to battery electric vehicles. VW is still trying to recover from the Dieselgate fiasco and this could help it fully recover and step forward if Tesla was to acquire VW. However, when you look at who owns VW, the size of the company, and the probability that the company is doing well on its own after taking on a leadership position in the EV transition, this possibility seems rather unlikely and impractical.
GM
The article noted that GM has a lot of people hate about it, like a bloated bureaucracy, tired designs, and “hidden thinking,” but it has the most electrification history, with the EV1 in another period being a great attempt. Notably, since most of its shares are in the hands of institutional investors, GM will be more accommodating to a Tesla takeover than VW.
Toyota
If Tesla bought Toyota, especially in light of Toyoda’s recent remarks about EVs and Tesla, it would be pretty funny. Pettiness aside, think about the consequences of the purchase of the hybrid leader by an EV manufacturer. I don’t think plugin hybrids are a step in the right direction for electrification because they still use fossil fuels, it would be a “perfect marriage of Japanese reliability and American ingenuity” to have an EV manufacturer purchase Toyota, the article noted.
I doubt that Toyota would be open to the idea of a Tesla acquisition, especially because Akio Toyoda believes that EVs are overhyped and believes that Tesla is only trading recipes. It’s an impractical choice, overall. If it existed, however, it would be poetic.
If Tesla Were To Acquire A Legacy Automaker
If Tesla were to buy out a legacy car manufacturer, I suppose it will wait until it reaches a $1 trillion valuation or greater. It would take a big commitment on Tesla’s part to buy one of the world’s top automakers. 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.
In order for Tesla to really do this, a fossil-fueled company will have to be merged and fully reinvented to fulfill its sustainability targets, and this could take years. It would be nice to see Tesla buy and do this with GM, Ford, VW, or some other legacy car manufacturer, but it would take a lot of effort and financing.
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