Expanding market share Tesla considers acquiring traditional car companies

According to foreign media reports, Musk revealed in an interview with the media a few days ago that in order to broaden market share and business scope, Tesla has plans to acquire traditional car companies. Interested. As of the close on December 1, local time, Tesla's total market value has reached 554.294 billion U.S. dollars, which is 8.7 times that of General Motors (market value of 63.951 billion U.S. dollars). It does have the confidence to acquire traditional car companies.

But from a practical point of view, Tesla’s current operating conditions also have some hidden concerns. In Musk’s recent internal letter to Tesla employees, it was mentioned that Tesla’s actual profit rate in 2019 was only about 1%. This company needs to control expenditures to achieve sustained profitability. If this is not possible , Tesla's stock price may also face an 'avalanche.' From this perspective, the acquisition of traditional car companies is clearly not conducive to controlling expenditures.

In the United States, Tesla is also facing huge expenditures due to large-scale recalls. On November 27th, the National Highway Traffic Safety Administration (NHTSA) stated that it had launched an investigation into 114,761 Tesla vehicles on front suspension safety issues. The models under investigation include the Model S produced from 2015 to 2017 and the Model X produced from 2016 to 2017. Facing the future, Tesla may have a lot of money to spend. At this time, it does require a lot of courage to acquire traditional car companies.

Editor's comment:

From the perspective of market trends, Tesla's current development prospects in the Chinese market are very good. From January to October 2020, the company achieved total sales of 92,051 vehicles in the Chinese market, of which 12,143 vehicles were sold in October. However, with the continuous unfolding of new energy offensives by traditional car brands such as Volkswagen, the potential competition in China's new energy market is also intensifying. In Europe, after the delivery of the Volkswagen ID.3, it won the championship of pure electric vehicle sales in October. At this time, Tesla's super factory in Berlin did not even get the qualification for battery production. This game between new forces and traditional OEMs may have just begun.