I have done several posts on this company.....actually they have not been very popular. Most people are not aware of the name. I have predicted that they will become a household name within two years. The reason I made that statement is that they have the best battery technology of any of the auto manufacturers. If I were in the auto business.....I would be trying to buy them or at a minimum access that technology. Currently, Tesla is not a public company, but if I they came out with a public offering .....I would be first in line for some shares.
Daimler (Mercedes) has done just that....they have acquired a 10% stake in Tesla. The deal was not disclosed but was priced at eight figures in Euros....$20 million minimum. This deal could give Mercedes a leg up on their European competition.
In January, Mercedes selected Tesla to provide batteries and charges for their Smart EV. Tesla has agreed to supply 1000 batteries within the next two years. It gives them access to the most advanced electric car manufacturer in the world. It is anticipated that Mercedes and Tesla will work collectively on battery systems, electric drive systems, and electric cars in development.
One of the weaknesses of German cars has been their electronics. Typically, the Japanese and American manufacturers produce cars with fewer electronic problems.
The Mercedes deal also has advantages for Tesla accessing Mercedes engineering production and supply chain management. Translated it means that Tesla will have access to German engineering for setting up the factory for the new Model S, and access to parts suppliers.
Summary:
Obviously, the Germans are very good business people....this is an exceptional deal for Mercedes. They were looking out for their strategic interests. The car business is done in billions of dollars, so this is a cheap investment in the future.
It gives Tesla help in building the factory for the Model S and some cash until federal loans are approved.
Peter that is very smart of Mercedes Benz to buy the 10% of the other company. (still do not like driving the Smart car at all.) It is not good in the snow or if it is windy. It helps you change lanes if you wanted to change lanes or not. Having to drive it 5 days a week. I like it less the more that I drive this car. Thank you for all the other cars that you talked about in this post. They look very nice.
ReplyDeleteDan and Deanna "Marketing Unscrambled"
Hi Pete .. you've told us about Tesla and their amazing battery technology .. and it's interesting that Merc have bought in .. and will use the batteries in their Smart cars .. the thing that interests me ..is that only 1,000 are being supplied within the next two years ..the quantity seems rather few? I guess there's a reason?
ReplyDeleteThanks - good to see you again ..
All the best Hilary Melton-Butcher
Positive Letters
Hi Dan & Deanna,
ReplyDeleteI am of the opinion that Mercedes has much bigger plans than just the Smart cars. That is probably the beginning....they may change their entire fleet within the next ten years.
I am not a fan of the Smart cars either! But, more small cars are on the way.
Thanks for your comments!
Pete Baca
The Car Enthusiast Online
Hi Hilary,
ReplyDeleteTesla is a small entrepreneurial auto company currently. The reasons that the order maybe only 1000 batteries is the
(1) they have limited production capacity until they build additional facilities
(2) they have battery production committed to Tesla vehicles
(3) that is the number Mercedes ordered.
So, I don't know the reasons but it could be any or all of the above reasons.
Thank you for your comments!
Pete Baca
The Car Enthusiast Online
Pete,
ReplyDeleteI am kind of skeptical in electronic cars. I think the future is in diesel. But every little bit helps when it comes to the dependency on oil. Great post.
Dr. Moulas
Hi Dr. Bob,
ReplyDeleteI agree that diesel is going to be part of the mix in the short term. The Europeans have some great diesels....ie the Mercedes S400 diesel/hybrid, Volkswagon Jetta TDI etc. Every manufacturer in Europe has a diesel solution. American manufacturers will also start production of diesels to meet the new CAFE requirements.
The reason that I think that electric will be a big part of the solution is that they are greener than diesels. The only issue with batteries is the price and availability of lithium....that could limit production.
Thanks for your great comment!
Pete Baca
The Car Enthusiast Online