Tesla (TSLA) and Daimler AG merger would highly benefit both companies if they were to merge. A couple weeks ago, Tesla CEO Elon Musk announced that he would be open to a merger with an industry rival.
“We are definitely not going to launch a hostile takeover. If somebody said it would be a good idea to merge with Tesla, we would have this conversation,” said Elon Musk.
According to Reuters, Daimler would be a great candidate for the merger between Tesla. Because Germany has a strong reputation in the vehicle industry it would help Tesla achieve a greater scale. Germany is very happy about this opportunity and is very careful with Elon’s decision to merge.
Benefits of Daimler AG and Tesla (TSLA) merger
Since Germany is highly respected in the auto industry and is quite successful, the reputation of both Tesla (TSLA) and Daimler will benefit. Daimler will allow better and faster manufacturing which would increase Tesla’s global output by around 5x. With Germany in connection to the world’s biggest battery development markets that include China and Europe, it confirms Elon’s viability of a merger.
So one question you may have is how much would a Daimler merger benefit Tesla?
With Tesla’s current production output standing at around 400,000 vehicles per year, merging with Daimler would increase this hugely. Daimler’s expected output per year is around 3 million vehicles. If Tesla could get a small percentage of output, it can surely skyrocket Tesla’s production and fulfill high quantity orders more quickly.
Tesla’s recent equity distribution
Tesla reached an agreement with major banks including Goldman Sachs, Citigroup, and Credit Suisse to sell up to $5 billion in new shares over a period of time. An analyst from Wedbush primes it as a smart move to growing Tesla’s cash position. I expect the company do increase global output of their vehicles. Since the company is looking to expand output, this is right in line with a possible Daimler AG merger.
