Mercedes Willing to Work With Tesla Again

Past Ben Shulz & Kyle Field

Tesla CEO Elon Musk has e'er been fairly straightforward about his willingness to open up Tesla tech to other companies. For example, he publicly commented nearly the possibility of partnering with Mercedes on an electric Mercedes Sprinter in November 2018.

This statement certainly wasn't a fluke and is actually just a natural extension of Tesla'due south mission to accelerate the adoption of sustainable free energy generation and electric transportation. With this mission in mind, it's only logical to pursue ideas that scale Tesla's superior electric vehicle platform every bit quickly as possible. In todays world, many electric vehicle manufacturers are pursuing electric vehicles by building a platform that other companies can apply to build and grow their own business. Tesla made this hope fifty-fifty more existent recently, with a new tweet from CEO Elon Musk confirming the company would be open to licensing its electrical motors, batteries, power electronics, and even software out to competing automotive companies.

What is important to understand is that for a platform to be attractive, another company needs to be able to build an attractive commercial product on the platform. What company could build a very attractive product on the Tesla technology platform?

Mercedes & BMW

Both Mercedes and BMW have been structurally weakened in recent years, with each company having lost roughly 50% of their respective market caps since 2015. Even if they teamed up to tackle the electrification challenge, they would not be able to pull together the necessary resources to have any hope of catching up with Tesla's technology in this decade. The story was unlike in 2015, and even in 2018, when they still could accept bought into Tesla at a reasonable price, but now in that location is no doubt they have been beaten at their own game: building the best book car at a premium toll. Based on their corresponding share prices, it's clear investors are of the same mind. Mercedes and BMW have no existing or future products that can compete with a Tesla.

In many means, Mercedes and BMW are very like to French or Italian luxury fashion labels. They nonetheless have dandy brands and have impressive skills in maintaining those luxury brands by continuing to improve on their interior and exterior vehicle designs, via neat marketing, and by tuning the ride to their target groups.

Would customers dearest a Mercedes E-Grade or BMW v-Serial built with Tesla applied science inside? I'm pretty certain they would, as the interface the customer has with the brand (interior, exterior, condition) would be the same. The look and feel of the cars themselves would not alter. We saw this exact miracle when Mercedes contracted with Tesla to electrify the Mercedes-Benz B-Form for California customers. The vehicle ownership, driving, and maintenance experience is 100% Mercedes, but the electrical powertrain, comprising a full fifteen% of the components in the vehicle, was supplied by Tesla. Some 8,000 of the vehicles were produced before it was shelved, and my wife has thoroughly enjoyed hers since 2014.

Licensing Tesla'due south electrical vehicle engineering, from battery to charging to Autopilot, would mean having best-in-grade tech. That is a natural fit with the experience Mercedes-Benz aspires to for all of the vehicles in its lineup. The pricing would be similar to Tesla's, with a pocket-size premium for a higher degree of customization and the scent of old-globe luxury.

Could a Tesla-powered electric vehicle be in the cards for Mercedes and BMW? Prototype credit: Chanan Bos, CleanTechnica

Information technology seems similar the adjacent call placed past Daimler CEO Ola Källenius should be to Tesla CEO Elon Musk to hash out terms for the deal. Doing this would save Daimler several billion euros that they wouldn't need to invest in their own software and bombardment tech (which would ultimately fail), while still allowing them to sell the all-time product. Tesla has demonstrated fourth dimension and time once again that it tin and will continue to innovate at a faster stride than any other automaker is capable of. Why engage in a game of cat and mouse that can't be won instead of just cutting a deal?

If Daimler and BMW are fast, they tin even offer to catechumen some of their factory infrastructure into gigafactories with a shared disinterestedness investment — which Tesla (through it'southward high market cap) could probable provide. Musk has also repeatedly chosen gigafactories "products," rather than but factories.

Does this take any potential to get reality? As weird equally it seems, Mercedes and BMW are running out of options — whether they like it or not. Whatsoever rational CEO would strongly consider this. Imagine having the opportunity to rewind the clock and knowing what we all know today almost the success of the iPhone. If you were able to license Apple's engineering science back in 2010, would you do so?

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I'm a tech geek passionately in search of actionable ways to reduce the negative impact my life has on the planet, save money and reduce stress. Live intentionally, make conscious decisions, love more, human action responsibly, play. The more than you know, the less you need. As an activist investor, Kyle owns long term holdings in BYD, SolarEdge, and Tesla.

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Source: https://cleantechnica.com/2020/08/01/why-mercedes-bmw-vehicles-need-to-adopt-the-tesla-platform/

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