A few days ago Daimler announced it had sold its entire stake in Tesla Motors, and now Toyota has sold “some” of its Tesla stake. That’s Tesla’s two major corporate backers, both the Daimler and Toyota investments were critical to Tesla’s survival to this point, exiting their relationships with Tesla Motors. At the same time some reports are circulating that BMW may buy a stake in Tesla Motors, and Tesla’s growth rate makes the company look set to challenge the incumbent automakers sooner rather than later. What’s going on?
On the one hand it may be a simple case of cashing out. Daimler’s investment of $50 million in May 2009 turned into over $780 million, the proceeds Daimler received from selling its Tesla stake. Toyota’s investment of $50 million in May 2010 gave Tesla the money with which to buy the NUMMI plant from Toyota, but reports don’t say what price Toyota got for selling its Tesla stake.
In other words, both companies could be doing what any investor does – cash out when they’ve got a huge gain on their hands.
At this level, corporations investing in corporations, the game is a little different. For example, Daimler had some interesting leverage over Tesla because Daimler had the right to name a Director to Tesla’s board. For example, Toyota had an asset it no longer needed – the NUMMI plant – and the deal allowed Toyota to exchange that asset for a stake in a fast growing upstart, whose technology might have been of use to Toyota had that company been more willing to work with Tesla.
Both Toyota and Daimler enlisted Tesla for help with each company’s electric vehicle programs. For Daimler, Tesla provided components for the Mercedes B-Class Electric (and an earlier vehicle whose name I’m forgetting). For Toyota, Tesla provided components for the Gen2 RAV4 EV.
In Toyota’s case the Gen2 RAV4 EV had a limited lifespan from the outset – if only because it was built on the previous RAV4 platform. For Toyota to produce more RAV4 EV’s would mean redesigning the integration. It’s not, as some report it, an “abrupt end” to the Toyota/Tesla relationship. It was known from the outset that Gen2 RAV4 EV production would be limited.
If Toyota were interested in continuing down the electric vehicle path, maybe the two companies would be seriously moving towards another Toyota/Tesla electric vehicle. Instead, Toyota is making it clear they think the future is in Fuel Cell Vehicles while glowingly boasting of their successful hybrids.
With Daimler, it’s not so clear what the future there is between the two companies.
Over on BenzInsider they suggest three possible reasons Daimler sold its Tesla stake:
- Tesla’s plan to share patents for free made it less necessary for Daimler to keep hold of its Tesla stake
- Feeling that Tesla’s stock is overvalued
- Tesla had eliminated Daimler’s representative on Tesla’s board, eliminating the leverage Daimler had over Tesla
Daimler did issue a fairly lengthy statement on the matter. Daimler says they’re pursuing a strategy for “emission-free driving” of which “electric vehicles are one component” and that Daimler’s relationship with Tesla will continue. Specifically, an investment in Tesla by Daimler is not necessary for the cooperation between the companies to continue.
In what we can take only as a wild-assed guess, ValueWalk suggests that BMW may have bought Daimler’s stake in Tesla Motors. ValueWalk offers no proof for this assertion, but reminds us that BMW did meet with Tesla last summer around the time Tesla opened its patent portfolio, and additionally wouldn’t it be cool if Tesla were to use BMW’s cool carbon fiber technology in building the Model 3? A Forbes contributor gives a similar theory about a possible tie-up between BMW and Tesla.
In other words, all we clearly know is that Daimler & Toyota are exiting from their investments in Tesla Motors. It’s not clear why this happened. If you happen to be an insider to the deals, and want to let us know, there is a comment box below.
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