- May 20, 2009
Is Tesla really worth $550 million? Daimler apparently thinks so
Elon Musk and Dr. Thomas Weber in the Tesla Roadster
During Tuesday's announcement that Daimler was buying a 10 percent stake in Tesla Motors, Mercedes-Benz R&D boss Dr. Thomas Weber would only say that the company paid in the "double digit millions" for its share. That implies somewhere between $10 and 99 million. TechCrunch's Mike Arrington specializes in digging up information on Silicon Valley startups and according to his sources, the actual amount that Daimler paid is $50 million for nine percent of Tesla. If they did pay that much, and based on Arrington's history, there is no guarantee that the figure is correct, that puts the value of Tesla Motors at about $550 million.
The benefits to Tesla are obvious: cash, a customer for some of its technology and access to engineering and supply resources. The question is, what does Daimler really get for its $50 million? While integrating battery packs and developing management systems is by no means trivial, Tesla is hardly the only source of that capability. Other integrators are already working with the new, larger format automotive lithium ion cells. Weber acknowledged that Tesla won't be its only partner on electric drive systems.
There are other possible explanations for Daimler's move. (Note: This rest of this is pure speculation on our part). One possibility we can see is that Daimler wanted to lock up Tesla's battery know-how for itself to prevent competitors such as BMW from tapping into it. BMW is playing catch-up in the EV space and went to AC Propulsion (from whom Tesla itself licensed some of its early technology) to build the MINI E. Another possibility is that Daimler is using the Tesla investment as a goodwill gesture. By keeping Tesla viable, Daimler could be seen by many EV fans as a savior of the electric car. For that kind of positive feeling, Daimler might consider $50 million a small price to pay. Only time will tell.