Who Would Be Better Off If GM Bought Tesla?

December 30th, 2013

Model_S

Can you imagine a Buick Model S, a Cadillac Model X, or maybe a Chevy Roadster?

A mashup between General Motors and Tesla might seem far-fetched, but at least one analyst of the automotive industry thinks a GM purchase of the electric automaker not only makes sense, but could happen in 2014.

If such a transaction did take place, the possibilities are intriguing to say the least. Would GM keep the brand and run Tesla just as another arm in its empire, or would it simply use the technology in its existing brands and kill off the Tesla brand?

It was only a couple of months ago that another analyst suggested that Apple should get into the car business and buy Tesla. That analyst argued that,

Apple’s shift into the auto sector could give the company the kind of revenue growth that won’t be sustainable from just smartphones and other mobile devices over the longer-term.

The move could reignite the U.S. auto industry and would be a catalyst to accelerate the current transition to hybrid and electric vehicles.

That makes sense in theory, but there’s really no reason for Tesla to sell just yet. It doesn’t really matter which company can afford to make the purchase and for what reasons, because Tesla has plenty of money and is doing just fine innovating, manufacturing and selling on its own.

On the flip side, GM ownership would jump-start production and help get Teslas into the hands of more people. Currently a used Tesla, if one can be found, costs nearly as much as a new one. That’s because the new ones carry government incentives that don’t apply to used ones. With higher production levels, prices of new and used cars will drop.

That’s the only benefit I can come up with to support a Tesla sale to GM. I see lots of negatives, but what do you think:

Would Tesla be better off if GM purchased it?

-tgriffith

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  1. Randy
    | #1

    You can count on GM to turn anything they touch into crap. Witness Saab, Suzuki, Saturn, Pontiac, Hummer, Oldsmobile, EV-1, hybrids, etc….

    Brands like Saab were so tainted by the GM stink that they never recovered when cast off, and you can be sure that any high tech company like Tesla will be ruined by GM’s bean counters. After all, look at the pitiful Volt. Innovation will cease, the price will shoot up, and buyers will run away.

  2. Joe J
    | #2

    I’m with Randy on this one, GM would probably end up killing Tesla in the long term. Having rented a Chevy Cruze somewhat recently, they’re still crap cars that make me wonder how they still exist when compared to my Mazda 3

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