Video: Praxis Trading Analyst – General Motors Might Buy Tesla in 2014

7 months ago by Eric Loveday 40

Tesla Motors is on a roll.

Elon Musk Has Personally Stated That Tesla Won't be Sold Until At Least Gen III Arrives in 2016-2017

Elon Musk Has Personally Stated That Tesla Won’t be Sold Until At Least Gen III Arrives in 2016-2017

Sure, Tesla has hit a few snags here and there, but the electric automaker continues to make all the right moves as it attempts the near-impossible: succeeding as a US startup automaker.

There’s been chatter from time to time regarding who will buy out Tesla and when, but Tesla CEO Elon Musk continues to insist that absolutely no buy out will occur until after Gen III launches in 2016-2017.  Even then, Musk says he may still on board and Tesla could remain independent, but in his view there’s no Tesla sell off until Gen III arrives.

Yra Harris of Praxis Trading thinks otherwise.

As Harris told CNBC, one the the Detroit Three could buy Tesla in 2014.  We think Harris is wrong, but Harris says General Motors and Tesla make “such a perfect fit” and that GM could buy Tesla in 2014 to get access to the technology it needs.  Harris seems to believe that GM is already in the process of studying Tesla and that a move to buy could come in less that a year.

Again, we don’t see this GM buyout of Tesla happening and certainly not in 2014, but we’re not all-knowing, so maybe we’re wrong.

Source: CNBC via ValueWalk

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40 responses to "Video: Praxis Trading Analyst – General Motors Might Buy Tesla in 2014"

  1. Alaa says:

    Don’t you think that GM should pay its debt to the tax payer first?

    1. David Murray says:

      I’m pretty sure they are all paid off at this point.

      1. Gibber says:

        If you consider paid being a 10.5 Billion dollar loss to the tax payers.

        1. Nix says:

          Gibber, GM paid the US govt with stock shares. At that point, they had met all of their obligations.

          When the US govt decided to sell those stocks, and for what price was none of GM’s business. GM didn’t choose to sell those stocks at a loss by selling them too early. That was the choice of the US govt.

          GM didn’t sell those shares at a loss, the US govt did. Unlike the Canadian govt, who also got shares in exchange for helping bail out GM. They still have the majority of their shares, and the way GM shares are going up, they will probably make a profit.

          Are you trying to hold GM responsible for decisions about selling stocks that it had absolutely nothing to do with?

          If you buy a company’s stock, and then sell it at a loss, who do you blame for your trading decisions?

          1. GSP says:

            Good point about the YS government deciding when to sell. GM has taken care of all the obligations, true enough.

            However the taxpayers are still out about $10B for the GM bailout. This was a good investment given what a GM failure would do to the economy, but many taxpayers don’t realize this.

            GM would be wise to set up a five or ten year payment plan to pay us taxpayers back. That way, if (more likely, when) they need another bailout, it will get public support.

            GSP

          2. Kieran Mullen says:

            How many times has GM been bailed out again? This was not the first time.

  2. vdiv says:

    I don’t think so. Daimler on the other hand is a good candidate.

    GM may buy ViaMotors if these guys manage to sell a few trucks…

  3. EVMD says:

    Tesla not a practical vehicle? This is a joke guy.

  4. Volt says:

    2 old guys babbling on about stuff they dont know

  5. Dr. Kenneth Noisewater says:

    With what $$?

    Tesla’d be more likely to buy GM. They’re hopefully not stupid enough to do that though!

  6. Loboc says:

    What Tesla tech could GM possibly need? GM was building EVs before PayPal existed!

    1. Weapon says:

      You mean the ones they crushed?

      GM has been building EVs with NiMH batteries, not Lithium Ion batteries. And they have lost most of their EV tech talents. They are far behind Tesla technologically.

      But realistically, GM can’t afford Tesla and Tesla is not going to sell.

      1. taser54 says:

        Balderdash. GM has had a fleet of Cruze EVs testing in Korea for the past 3 years. The Spark EV is the most efficient EV produced today with a propulsion system that is easily scalable. The Volt is a far more complex technology than anything Tesla has produced. So to state that GM doesn’t have the technological chops to deal with Tesla is not supported by reality. Now if you want to argue that GM currently does not want to challenge Tesla directly with a $80k+ BEV, fine. But the signs point to GM being more than willing to fight Tesla at the $40k EV pricepoint.

    2. kdawg-etti says:

      I doubt GM would want any of the tech since theirs is already more advanced. However, the brand name and the supercharger network would be nice assets. Not sure how this deal would work out with the NADA.

      1. ItsNotAboutTheMoney says:

        NADA is just one of the myriad reasons there is NADA snowball’s chance in hell of this happening. No existing manufacturer can use Tesla’s sales and service model and therefore Tesla USA wouldn’t be able to use Tesla’s sales and service model.

  7. David Murray says:

    I’m not sure that Tesla has any technology that GM particularly needs. But Tesla does have the brand name that could definitely help GM succeed in the EV market. However, knowing what I know about GM, I’m afraid we’d start seeing things like the Chevy Volt or Spark EV rebranded as a Tesla. That would just destroy the Tesla brand name.

    1. Kosh says:

      Actually, maybe GM would like to buy back NUMI at a discount…

  8. Kosh says:

    That could be terrible.

    I worked for a startup that developed the first “full service” car sales website during the dot-com boom. Microsoft swooped in an bought the company…. then shut it down.

  9. GeorgeS says:

    Terrible fit. It would ruin Tesla. Dumb idea. GM can stand on their own 2 feet in the EV biz. Tesla doesn’t have any tech that GM needs.

  10. Bret says:

    I was watching CNBC when this feature came on and I almost died laughing. I respect Rick Santelli as a trader, but he is definitely clueless about Tesla and the EV market.

    GM needs to focus on their own EV efforts and they seem to be doing just that. If the next-gen Volt is what they are hinting at, it should be very successful. The Spark is a good start at a pure BEV and they could sell a lot more of them, if they choose. The huge opportunity for GM is in electrifying their trucks and SUVs. They should buy Via Motors, instead of Tesla.

    Tesla has zero interest in selling out to GM or anyone else while they are such a huge success and likely to take a much bigger market global share in the next five years.

    1. David Murray says:

      Indeed.. Via Motors is the direction GM needs to go. I suspect they could electrify their own trucks during the assembly process and probably reduce the cost by $20,000 per vehicle to the consumer.

      1. Brian says:

        What does VIA motors have that GM doesn’t? All GM needs to do is put Voltec into their trucks and SUVs, and they can built what VIA builds, for less!

        1. David Murray says:

          I am under the impression VIA is using something very similar to voltec. But they’ve obviously designed a system that is more powerful for use in larger vehicles. GM could obviously develop it themselves, but if the designs are already there, why not use them and save themselves the trouble. (assuming they are good designs)

          1. kdawg says:

            They are using (Delco) Remy’s system.

  11. Dan Frederiksen says:

    I think the analysis is wrong. Tesla has no technology that GM couldn’t trivially copy without buying Tesla. It’s laptop cells and high rpm AC induction motors. The only unknown for me is what exactly it takes to make a motor last up to 15krpm but that can’t be a major secret and certainly not worth 20bn$.
    The Tesla image might be good to have in the GM family but it would force a conflict with the Cadillac brand and again, not worth the price.
    Although in company takeovers the price isn’t typically a conventional expenditure which GM could never afford so who knows what crazy things will happen.
    I don’t think it will happen though and I wouldn’t recommend GM try. It would be much better if GM simply got their act together and hired some progressive minds. Namely me.

    GM probably couldn’t afford to buy TSLA anyway and the owners might not want to sell.
    Current market cap is 19bn$ and to buy it all they might have to pay 25 or more. That’s not chump change.
    Apple could afford it but I wouldn’t recommend that either.
    TSLA simply isn’t worth the money

    1. Taser54 says:

      This is a reasoned post. Job well done Dan.

    2. Mikael says:

      Tesla will be a bigger brand than Cadillac and sell more cars sometime in 2016. So if they could afford it and would plan to nurture it then it could have been the best deal they had ever made. But it’s not going to happen, it’s like trying to mix oil and water (environmental pun intended ;).

      I find it more likely that they will be going head to head as equal giants in 15 years or so.

  12. Jouni Valkonen says:

    Elon Musk has 30 % ownership of the company. I am pretty sure that Elon will veto agains all possible buy proposals. Tesla is not for profit company, but the company philosophy is to accelerate the progress of electric vehicle technology, because big car companies has no motivation to push EV technology forward, but to bring golf carts into niche markets in hopes of Government subsidies.

    1. Bonaire says:

      Government subsidies? You haven’t read the Tesla history, have you? Know what a ZEV credit is? How about DoE loan? Etc… Norway subsidies and incentives let EVs lead monthly new car sales. Lots of government subsidies helping all EV makers. Without government incentives over the last three years, Tesla would not exist.

      1. Jouni Valkonen says:

        Tesla buyers would buy Model S even without subsidies. But since you are a known troll, I do not argue with you.

        1. ClarksonCote says:

          A known troll? Bonaire? That made me LOL

      2. Brian says:

        You clearly did not read and comprehend Jouni’s post. The point isn’t that Tesla doesn’t benefit from incentives. The point is that incentives are not the only reason they are making EVs, unlike pretty much every other manufacturer.

  13. Nix says:

    The only thing we know for sure, is that these guys have absolutely zero inside information. They are just blowing smoke.

    Because if they actually did have inside information, they would have just violated SEC rules on insider trading. So by definition, they know nothing.

    1. Bonaire says:

      Well, it sure did move the stock value. Maybe on purpose, maybe not. Very dumb statement to first say “might buy Tesla” and later say the value of the stock is way too high already… An analyst shouldn’t create news that is not news to advertise for and help prop up an already overvalued stock.

      Give it a couple years. Tesla stock value will hit a point where a buyout might make sense.

  14. Future EV Driver says:

    Maybe that’s the GM Tesla Killer plan, buy Tesla then kill it…

    Well maybe when Elon’s ready to sell for 50 billion in 2020, but not in 2014!

    Remember rockets and fuel cost ALOT of money!

  15. Martin T says:

    Hope not – we need to keep New & old competitors apart, this way there is progress on both sides. :-)

  16. Priusmaniac says:

    This is the kind of anouncement that should be made on april 1.

  17. Mark C says:

    GM would probably treat Tesla like Ovonics and shaft the American people. They are a for profit business and not trying to make friends, only give that illusion to sell more product. Tesla makes only EVs and desirable ones at that. I’m sure that makes the ICE makers mad since they can’t stand up and say “EV’s don’t work” without being laughed at.

  18. Joseph Lado says:

    Tesla would be a horrible fit into GM. This guy doesn’t know what he is talking about. GM has a bad culture and would end up killing Tesla. Tesla, as an innovative company would chafe under GM’s rules. People who want Teslas will not be bate and switched to Cadillacs.

    GM would have been much better off if it had bought Fisker. Fisker would have been a perfect fit. They could have put together the Karmas in the excess time they have available on the Corvette line. They could have sold it through their Buick division. The Fisker Atlantic, which was to be a mass produced plug-in hybrid, could be a Volt in Fisker’s hot styling. The could have renamed it the “Aura” in like with the Karma theme. GM then could have introduced another small plug-in hybrid and called the “Kismet.” GM should still try to do this.