Why Tesla Should Buy Mercedes-Benz
Although Tesla has recently been under scrutiny for enabling in-car video games while driving, and despite Mercedes itself being vocal about it, we at Osterus think the American EV A-lister should simply buy the famous German car manufacturer.
Why?
Well, there are 2 reasons.
Tesla’s got mad money. That’s the first reason. The second reason is that this type of acquisition would help this company grow faster and greener, which would probably help Tesla lock itself a pole position as the leading car manufacturer for many years to come.
Mad Money and Luxury Market Share
Despite Tesla’s stonks.. ahem, stock experiencing a declining trend lately, some of which is due to Elon Musk selling a solid portion of his own Tesla shares and smoking funny cigars on the Joe Rogan podcast, the billionaire’s company currently has a market cap of over $941 Billion. This is more than Toyota, Volkswagen, Ford, Mercedes Benz, BMW and General Motors combined (at the time of writing).
Naturally, the market cap isn’t the only metric to consider when evaluating how much a business is worth, but it is currently the main one public equity investors use to evaluate companies.
And when we take into consideration that Tesla’s US-based EV market share continues to decrease while its luxury share is on the rise (now outselling Mercedes-Benz), it could be a bold but smart move for Tesla to acquire the German car giant.
Growth, Trucks, and Sustainable Technologies
The other reason I mentioned before is growth. We used our Osterus software to compare Tesla to other auto OEM behemoths like Porsche, Mercedes-Benz, BMW and other similar companies in terms of workforce analytics, to find which one of those would be the best fit for Musk’s empire to acquire.
We found it to be Mercedes. Let’s see why.
Scalability and Compatibility
Despite its success, Tesla is still a young and relatively small company when compared to other huge industry names. Most established auto OEM brands feature full-fledged lines of vehicles across various classes, whereas Tesla’s line is still somewhat limited.
Should the said acquisition take place, Tesla’s business potential and product line would likely multiply dramatically and immediately, especially with its rising brand and EV approach. And when we take into account numerous other aspects of this potential deal, we can see that both companies would benefit from it.
What Can Osterus Tell Us?
For example, if we take a look at some metrics and data points that Osterus fetched when we used our app to compare the workforces of Tesla and Mercedes, we can see that there are multiple compatibility points.
Workforce, Experience and Job Titles — Based on the profiles we analyzed, our app revealed that Mercedes has more average experience duration in its workforce overall. Tesla has much more Engineers, Customer Service representatives, Managers, HRs, Data Engineers, and Consultants/Partners than Mercedes, which means that there wouldn’t be much overlap in these departments.
In terms of IT Engineers and business-based job tiles, Mercedes has enough work power here, which means it would be a solid reinforcement for Tesla where this company is probably the strongest on the market.
Education Degrees — Examining education degrees of both workforces, we can see that Mercedes has more Ph.D. and Master’s degrees than Tesla, which means that Tesla could use a bump in those numbers.
Languages — Osterus shows that the main languages within both workforces include English, German, Spanish, French, Chinese, Hindi, Italian and Russian — with quite a similar relation in percentages.
Gender Diversity — Mercedes is doing fairly better in terms of female workers percentage, which means Tesla would definitely improve its gender diversity score should they choose to buy Mercedes and implement more female employees.
For more workforce, HR, BI, investment and M&A insights, check out Osterus analytics platform.
The Battery Charging Network
Setting quite a high standard for EV charging infrastructure and the quality of equipment is something Tesla has been good at from the very beginning. However, its charging network is still ripe for expansion, especially if they want to widen their product line.
And with other big EV names like Mercedes and BMW themselves increasing their equipment standards and networks, Tesla needs to step up its game. Acquiring a major OEM name would definitely help them with this effort.
Trucks!
It is quite clear now that a large portion of altering the EV landscape for the better must include the production of trucks and other large-format vehicles. Tesla surely has shaken this market just a tad with its Cybertruck…
… but they simply need to invest more in creating actual transportation trucks and vehicles that would make a tangible difference and bring change to the current supply-chain ecosystem worldwide. So, I simply don’t see how this could be possible with their current market position (unless they have something big up their sleeve that we don’t know about).
And Daimler? Daimler has a great product line of trucks and buses to offer.
The Color Green
Those of us who care deeply about climate change can see that Tesla doesn’t have the required organic and sustainable growth levels to properly move the needle within the set timeframes.
According to projections made by Bloomberg NEF, only 30% of the global passenger vehicle fleet will be EVs by 2040, and as we need 60% of new car sales to be zero emissions by 2030 in order to achieve the “Net Zero Scenario”, some of the big players will have to make some pivots and think about joining forces.
But is this Acquisition Even Possible?
One might assume that even considering this scenario is a bit far-fetched, but with the global business market evolving fast, regardless of the industry, these huge acquisitions might be much closer than we think.
Admittedly, for Tesla to buy a reputable automaker now, it would mean that — aside from having a lot to deal with on its own — Elon’s company would likely find itself deeply entangled in legacy economic ecosystems, unions, dealerships, etc — which means that he would have to factor in completely new structures Tesla hasn’t considered incorporating. Given that most large M&As fail, roughly 75% are not successful, it’s always risky to acquire a large company. Let’s not forget the Mercedes and Chrysler merger.
Not taking into consideration to be net-zero, we also need to make sure the electricity we are using does not come from fossil fuels and that the supply chain is also based on carbon offset techs, or that the whole production comes from a sustainable energy source.
Personally speaking, I think Tesla should definitely consider acquiring a company such as Mercedes and try to incorporate the best of both worlds. In this article, we focused on Mercedes and looked into our workforce comparison report for the two brands. But any other car manufacturer of this magnitude would be a great acquisition for Tesla, especially considering its current market cap.
If you’re interested in using Osterus to analyze your competition, assess the potential M&A opportunity, or something else — feel free to schedule a demo and we’ll explain how we can help your business grow.
We have a saying here at Osterus, “Let the data speak.”
