Why Tesla merger doesn't make sense

Partnerships and mergers are developing throughout the global auto industry.

Tesla is the odd man out in this trend.

At one time, a tie-up with Tesla might have made sense, but Tesla now wouldn't bring much to a deal.

It looks like Tesla is now going to have to go it alone.

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Last week, Fiat Chrysler Automobiles and Renault announced a plan to merge. If it goes through, the combination would create the world's third-largest automaker, behind Volkswagen and Toyota, and just ahead of General Motors.

Other carmakers are partnering left and right. The alliance of which Renault currently belongs includes Nissan and last year added Mitsubishi. Ford has joined with Volkswagen. For its part, GM and Honda are co-investors in GM's Cruiser self-driving startup. Mercedes-Benz and BMW want to co-fund an autonomous electric-vehicle platform.

Tesla, meanwhile, has the market cap of a major car company — some $35 billion even after shares were hammered down through the first half of 2019 — and appears to want to work with no one.

Tesla is going it alone.

Read more: Nobody is going to buy Tesla — the company is on its own

In the past, Tesla saw investment from Toyota and Mercedes parent Daimler (since ended, rather lucratively for both), but for the past few years, the company has funded its growth by selling more of its own stock or by issuing debt. Access to equity markets is an advantage that Tesla has over competitors, as most of them aren't able to use Wall Street as an ATM. So don't begrudge Tesla that capital-raising option, which it would be foolish to avoid.

The big auto equivalent is to buy startups, as GM did with Cruise in 2016 for $1 billion all-in, and then to court outside investment. Follow-on stakes from the SoftBank Vision Fund and Honda have boosted Cruise's valuation to almost $20 billion — close to half of GM's market cap.

The time has passed for Tesla to partner

Don't look for Tesla to make any big purchases, and don't expect the company to join forces with anyone to lower its costs or assist in improving what has been a pretty woeful history of vehicle launches and manufacturing ramp-ups. In fact, don't look for Tesla to get any help from anybody. The time has passed.

That's not because Tesla is a true competitor; the EV market remains tiny, disappointing, and expensive to participate in, so most automakers are still testing the waters. Tesla is beginning to threaten traditional gas-powered luxury car sales, but until CEO Elon Musk and his team can do that for years and years, the BMWs and Porsches of the world are unlikely to panic.

Tesla's strategy of going it alone is actually a consequence of the company having little to offer a partner. Electric cars might still seem novel, but they've been around in one form or another for a century. Tesla made them cool and has been rewarded with upwards of 250,000 in sales in 2018 and at times a market cap of more than $50 billion. But the technology is nothing remarkable: batteries and electric motors. Tesla has provided some innovations, but nothing spectacular; its value has come from packaging — its cars are well-designed and beloved by owners.

Tesla isn't unique. It's a car company, and we already have dozens of those. That's why Tesla's stock is being so dramatically repriced; the markets have figured out what they're dealing with.

What costs could Tesla save a partner？

Carmakers merge or partner mainly to reduce costs. The business is highly capital-intensive and cyclical, so auto companies are always balancing investment in new stuff with the need to hoard cash in the event of a sales downturn.

It isn't easy to see how merging or partnering with Tesla (the former unlikely given Tesla's elevated valuation) would lead to a cost reduction at any level. Tesla has only about $5 billion in cash, and it has lost money every quarter save three in its decade-and-a-half existence.

Tesla has also served as a frontrunner for risk in the electric-vehicle space, as it has spent billions to establish a market — billions that other carmakers haven't had to spend. They can now jump in. But they're certainly prefer that an independent Tesla sustain much of the ongoing risk.

So Musk isn't going to get a partner, and he isn't going to merge Tesla with anybody. Best case, an established automaker that's behind the curve a bit, but that has a strong balance sheet (Toyota leaps to mind) takes a stake in Tesla.

Partnerships and mergers are a trend now in the car business, but that's not the only trend Tesla is missing out on. The company has also benefited only marginally from four consecutive years of record vehicle sales in the US. That's starting to change, as Tesla builds and sells significantly more cars. But it was perhaps too slow to develop new vehicles and get them to market.

None of this means Tesla is in some kind of crazy trouble. It simply means that the first new American car brand to be successfully established in decades is now going to stand or fall on its own merits.

合作伙伴关系和合并正在全球汽车行业发展。特斯拉是这个趋势中的奇怪人物。曾经与特斯拉合作可能已经有道理，但特斯拉现在不会带来太多的交易。看起来特斯拉现在必须单独行动。访问Business Insider的主页以获取更多故事。上周，菲亚特克莱斯勒汽车和雷诺宣布合并计划。如果它通过，这个组合将创造世界第三大汽车制造商，仅次于大众和丰田，并领先于通用汽车。其他汽车制造商正在左右合作。雷诺目前所属的联盟包括日产和去年增加的三菱。福特加入了大众汽车公司。就其本身而言，通用汽车和本田是通用汽车巡洋舰自驾车创业公司的共同投资者。梅赛德斯 - 奔驰和宝马希望共同资助一个自动电动汽车平台。特斯拉同时拥有一家大型汽车公司的市值 - 即使在2019年上半年股价下跌之后仍有约350亿美元 - 并且似乎想与任何人合作。特斯拉正在单打独斗。阅读更多：没有人会购买特斯拉 - 公司本身就是这样的。过去，特斯拉看到丰田和梅赛德斯母公司戴姆勒的投资（自此结束，对两者而言都相当有利可图），但在过去几年中，该公司通过出售更多自有股票或发行债券来为其增长提供资金。进入股票市场是特斯拉优于竞争对手的优势，因为他们中的大多数都无法使用华尔街作为ATM。因此，不要吝啬特斯拉那种资本筹集方案，这是愚蠢的避免。 大型汽车相当于购买创业公司，就像通用汽车公司在2016年以10亿美元全押的价格购买Cruise，然后再向外投资。软银远景基金和本田公司的后续股权将Cruise的估值提升至近200亿美元 - 接近通用汽车市值的一半。特斯拉合作的时间已经过去了。不要寻找特斯拉制作大型采购，并不期望公司与任何人联手降低成本或协助改善车辆发布和制造业增长的历史。事实上，不要寻找特斯拉从任何人那里得到任何帮助。时间已经过去了。那不是因为特斯拉是一个真正的竞争对手;电动汽车市场仍然很小，令人失望，并且参与费用昂贵，因此大多数汽车制造商仍在试水。特斯拉开始威胁传统的汽油动力豪华车销售，但直到首席执行官埃隆马斯克和他的团队可以这么做多年，全世界的宝马和保时捷都不太可能恐慌。特斯拉的战略实际上，这是公司很少提供合作伙伴的结果。电动汽车可能看起来仍然很新颖，但它们在一个世纪以某种形式存在。特斯拉让他们变得很酷，并且在2018年获得了超过250,000的销售额，有时市值超过500亿美元。但这项技术并不值得注意：电池和电动机。特斯拉提供了一些创新，但没什么了不起的;它的价值来自包装 - 它的汽车设计精良，深受业主的喜爱。特斯拉并非独一无二。这是一家汽车公司，我们已经有几十家。这就是为什么特斯拉的股票被大幅重新定价的原因;市场已经弄清楚他们正在处理什么。 特斯拉可以为合作伙伴节省多少成本？汽车制造商合并或合作主要是为了降低成本。该业务是高度资本密集型和周期性的，因此汽车公司总是在平衡对新产品的投资以及在销售下滑时囤积现金的需求。不容易看出如何合并或合作特斯拉（前者不太可能给予特斯拉的估值提高）将导致任何级别的成本降低。特斯拉只有大约50亿美元的现金，而且在其十五年的存在中，它每季度损失三美元。 特斯拉也是风险的领跑者电动汽车领域，因为它已花费数十亿美元建立市场 - 其他汽车制造商不必花费数十亿美元。他们现在可以进入。但他们肯定更喜欢独立的特斯拉维持大部分持续存在的风险。因此，马斯克不会得到合作伙伴，他也不打算将特斯拉与任何人合并。最好的情况，一个已经落后曲线的成熟汽车制造商，但有一个强大的资产负债表（丰田想到）占据了特斯拉的股份。合作伙伴关系和合并现在是汽车业务的一个趋势，但那是不是特斯拉错过的唯一趋势。该公司还从美国连续四年创纪录的汽车销售中获益匪浅。随着特斯拉制造和销售更多汽车，这种情况开始发生变化。但是开发新车并将它们推向市场可能太慢了。这都不意味着特斯拉陷入了某种疯狂的困境。这仅仅意味着几十年来成功建立的第一个新的美国汽车品牌现在将依靠自己的优点。