I’m not going to lie — I’m not a fan of premature speculation. Nonetheless, it’s hard to avoid it when it involves Tesla, Google, and Apple, and when it’s started by Bloomberg. So, here’s the (super premature) speculation, why Tesla isn’t going to be sold anytime soon, and why we shouldn’t even be discussing this at this point in time… and should be writing about California high-speed rail or something.
The sleuths at Bloomberg (or probably elsewhere first) have noted something interesting about Tesla Motors’ now-paid loan agreement with the US Department of Energy (DOE). Within the agreement, Tesla could not offer itself up for sale as long as it owed the DOE money.
Well, to big fanfare and resulting in a surging stock price, Tesla recently paid off its DOE loans 9 years early. That means, of course, that it’s now legal for Tesla to put itself on the market. But to whom would Elon Musk and crew sell the company?
Well, Musk has previously stated that if Tesla were to be sold, it would have to be to a rich, tech-focused company with a good heart (okay, he didn’t put it in those words… but you get the point). Musk did note that Google would be one very decent option.
For years, Google has had a very strong focus on renewable energy and cleantech. It wants to help the world, and it wants to use its tech expertise and sizable wallet (the real Google Wallet) in order to do so. Additionally, it’s got a big self-driving car program going that is clearly within the same product realm. I think anyone familiar with this space could very definitely see Google making such a purchase.
Bloomberg has decided to go ahead and dedicate a post to the subject, and while I probably wouldn’t otherwise (see below), I’ll go ahead and chime in, too.
Tesla Wants To Wait
Chairman and CEO Elon Musk has said numerous times that he’s not stepping down from the head of Tesla until it has created a mass-market, affordable EV. That’s still several years away. The next few years should see Tesla bring its electric SUV, the Model X, to market. Following that, the plan to to bring to market a smaller EV that will sell for about half the price of the Model S. The target year for that is 2017.
Even in an interview with Bloomberg last month, Musk said: “I’ve said from the very beginning, from the creation of Tesla, that our goal is to create a compelling mass-market car. I would not consider stepping away from Tesla until we’re there…. We’re several years away obviously.”
Google (& Anyone Else) Would Be Better Off Waiting
On the flip side of the equation, I don’t think anyone would be up for buying Tesla at the moment anyway. As Bloomberg rightly notes, Tesla is currently trading for 816 times more than its 2013 estimated earnings. 816 times. (Note: for various reasons, not the least of which were numerous, sequential announcements by Tesla, the company’s stock has broken through the roof in recent months.)
So, at this point, Tesla seems to be greatly overvalued on the stock market, and any potential buyer would probably be much better off waiting.
Aside from Google, other potential buyers (down the road!) could be Apple, any of the major automobile companies, or EV Obsession (oh, wait… scratch that last one).
Jumping The Gun
As I stated above, I wouldn’t have even gotten into this discussion if Bloomberg didn’t get it rolling. This is not something Tesla seems to even be giving much thought to at this point. In the interview mentioned above, regarding a question about a potential takeover, Musk replied, one of the possible outcomes, I suppose.”
“I suppose…” not the strongest response. In response to Bloomberg‘s emails regarding this new story on the takeover option, Musk and even tesla spokeswoman Shanna Hendriks didn’t even give Bloomberg an email response. In other words, really, let’s move on — it’s way too early for this.