Tesla plans to buy Mercedes Benz

[rr6013]

Rumor mill conspiracy theories and conjecture are rife online. What if…

Mercedes Benz is in play? BAIC, its Chinese parent company, acquired Mercedes Benz, German nationalism and pride-of-ownership be damned. It’s no longer unimaginable. The next hurdle becomes why would BAIC entertain letting M-B out of its stable? Here’s what BAIC would have after sale:

It could retain Daimler Truck which just recently split away as a standalone entity. Maybe it was split in anticipation for an eventual sale? IDK. But BAIC would retain Hyundai and KIA. Both are moving well in the marketplace with Hyundai going upmarket while KIA is capturing downmarket sales - worldwide. What if it were true that M-B luxury product is not a fit to the BAIC supply chain. M-B holds $150B debt which economy of scale from Hyundai cannot help it cut costs. Is Tesla looking for more debt, more luxury cars and more legacy factory manufacturing?

Tesla absorbs M-B it looks like a separate division, brand and product. M-B is electrifying, computerizing and going ADAS fleetwide. What are Tesla incentives to acqui-hire, merge or buy M-B? First, $150B debt is attractive to shelter Tesla profits. However the tie-up Tesla can carry the cost of bringing M-B aboard longterm. What are the synergies? Complementary products, technologies and an opposing ADAS philosophy. Tesla and M-B would gain economy of scale merging its supply chains going forward. Tesla and M-B could share technology development spread over both brands products. Importantly, M-B could retain its independence and philosophy while riding aboard Tesla technology train., maintaining its distinction and its differentiation. Its a reasonable possibility then to consider.

What are the probabilities? M-B is the only marque which Tesla could gain the most, from an acquisition, merger or acqui-hire. M-B is the only marque that brings a long history of knowledge, expertise and success Tesla are just beginning to encounter in the luxury space. M-B gains decades of Tesla high technology zeitgeist that it doesn’t stand a chance of catching-up to in BEV motors, electrical, battery and manufacturing.

What’s unreasonable? BAIC is creating a competitor. Not in its Hyundai or KIA automotive space. though. Daimler Trucks have a direct threat from Tesla Semi. Why would they agree to let Tesla build its Semi cheaper at its own expense? More 4680 cells used in M-B, cheaper the cells are to pack Semi’s humongous battery. Tesla would have to be willing to exit the trucking business if BAIC objects. And BAIC might benefit buying Semi, 4680’s at discount and gain battery cells for its Freightliner and Peterbuilt tractors. Or compromise.

Longterm, measured in EM years, there’s overhead where M-B and Tesla costs can be shared in R&D, Mfg, Design and Logistics. This includes China that is a market where M-B critically needs a presence. Tesla can bring M-B into China. Eventually, the two marques never combine brands into one. BUT for the closing thought on the transaction? Elon Musk has nearly tranched out his ownership tokens in Tesla. Who better than M-B culture, global reputation and success worldwide could Elon Musk leave to Tesla and Tesla talented executives to be in better partnership?

Mars is calling…is that worth the $500B Tesla would spend getting Mercedes(@5x multiplier). I don’t know another company that could swing that in the debt markets. Interesting…and does BAIC need $500B cash/equity? Horrors, Tesla would have an ace in the hole FSD is a bust. Best of all outcomes, M-B gains FSD when it goes mainstream and no one else can buy it!

Where is the limiting factor? I fail to see a downside.

 

[BillyGee]

Why would you buy your competition if they're lame and overpriced?

 

[rr6013]

Why would you buy your competition if they're lame and overpriced?

Precisely!

Biggest return possibility simply making the biggest impact. Demand remains for the Mercedes brand seprately and for preferences that differ from Tesla buyers. Lame accrues to Tesla’s benefit. It discounts the transaction up front.

Tesla could kick “lame” out of M-B which occurred the day it replaced wood with plastic everywhere. The marque has never been the same since, IMHO

 

[WildhavenMI]

I don't see the net benefit from buying M-B to Tesla. What Tesla is constricted by is not sales volume or exposure to that market, its:
- Manufacturing capacity
- Battery supply
- Eventually, raw material availability

If Tesla is going to do some acquisition, it's going to be to address those problems. Maybe they'll buy another Maxwell-like entity, or something that addresses manufacturing capacity. Considering M-B has negligible volume in terms of manufacturing, it doesn't even address that issue.

Buying M-B would be nothing but a money pit and a distraction IMO.

 

[JBee]

There are three reasons I can think of:
1) skilled employees with
2) already setup manufacturing facilities that are approved and
3) some prestige and heritage

 

[Ogre]

Nope

Tesla merger rumors are much like Apple merger rumors.

Almost always wrong.

 

[rr6013]

I don't see the net benefit from buying M-B to Tesla. What Tesla is constricted by is not sales volume or exposure to that market, its:
- Manufacturing capacity
- Battery supply
- Eventually, raw material availability

If Tesla is going to do some acquisition, it's going to be to address those problems. <snip>

Buying M-B would be nothing but a money pit and a distraction IMO.

Interesting point.

M-B not big enough, is a challenging assertion. IDK how big an impact Mercedes would have on Tesla’s economy of scale. Mercedes might be small potatoes(read lost cause). Mercedes could be too much effort for marginal return.

IFTesla doesn’t save taxes, earn greater profit thru technology transfer to Mercedes and doesn’t even afford any market segment growth in luxury class as a result of M-B, then “What’s the Point?” That would be its limiting factor - size.

Tesla took plenty of arrows in its back getting BEV off the ground, proofing battery and changing the whole industry. Last thing it needs is a heroic waste of precious treasury, time and resources for a has-been boutique coach builder with $150B debt necklace.

Elon would only chase a 10X paradigm shift in owning a M-B luxury marque. Its an upper class that the Tesla brand does not tread nor represent as Tesla. M-B affords that entry. But maybe it’s a mirage?

 

[Crissa]

What would Tesla get out of the deal?

Their factories can't make Teslas.
Tesla already is maxed out in battery and drive-train production, so they can't add value to a subsidiary.
And Mecedes-Benz should be very profitable on their own right now, buying them would require paying for that profit ahead of time.

On all measures, it's a net loss for Tesla today.

-Crissa

 

[Ogre]

The only sort of deal with MB that would make sense for Tesla is if it were access to design patents and branding only. That doesn’t make sense for MB.

No common ground here.

 

[Klaxon]

Dear Tesla owners:
1. Are you ready to exchange your Teslas for Mercedes Benzes?
2. Are you ready to place the M-B badge on your Teslas?

If not than stop thinking about M-B as the luxury cars.

 

[Sirfun]

Hasn't Tesla/Elon had all the fun they could stand already with German Bureaucracy?

 

[John K]

Deja vu?

What if Mercedes is the one buying Tesla? Cybertruck in German must sound angry.

 

[Ogre]

Deja vu?

What if Mercedes is the one buying Tesla? Cybertruck in German must sound angry.

Do the Germans still own Stellantis Daimler/ Dodge/ Mercedes Ram Fiat/ and All-The-Other-oddball-brands?? I thought it was owned by some Italian conglomerate managed by the French with HQ in Norway at this point.

 

[jerhenderson]

There are three reasons I can think of:
1) skilled employees with
2) already setup manufacturing facilities that are approved and
3) some prestige and heritage

none relevant to EV.

 

[Crissa]

Germans think 'schmetterling' is a pretty word. They're a weird people. ^-^

-Crissa