Will Ford buy Tesla?

Shutterstock.com/ Nadezda Murmakova

Every day Tesla hit the news for some reason. Sometimes it is a good news story as their cars are in incredibly high demand, the best electric car on the market, are introducing incredible new features all the time and appear to be leading the environmental charge in car manufacturing. Often though it is bad news, aside from the eccentric owner the car company is plagued with issues and is yet to turn a profit. The issues largely come down to supply and manufacturing as they struggle to produce cars efficiently and without any issues. All of this makes very interesting reading for the car company but how long can it last. Unless Tesla solves its supply problems soon shareholders will lose faith in the future of the company and back out. One idea that could solve all of Tesla’s issues is a partnership or buyout.

Of course, a company like Tesla would cost a lot of money and there are not many potential suitors who have the sort of finances required to purchase such a beast. One company that Tesla would suit perfectly and that has lots of finance, is Ford. 

Aside from Tesla’s existing issues, the market is about to get a lot more competitive. Tesla had a lead on many of its competitors. For a number of years now if you wanted a high-quality electric car Tesla was the only game in town, but that is quickly changing. Porsche, Jaguar, and many others are all finalizing their electric vehicles at present and will be offering sleek competition to Tesla very soon. Just because Tesla was quick to the market does not mean it is guaranteed market share. If the company combined with Ford it would give it the supply solutions that would allow it to produce a higher number of cars at a lower cost and take a significant slice of market share before the others get a chance to bed in the market properly. This is why now is the perfect time for this deal to happen.

The second reason that now is a perfect time is because of the looming issue facing Tesla. If you want to buy an electric car in America you are gifted a once-off tax credit of $7,500. This has lowered the price of any electric car and has been a huge positive for Tesla. However, it only applies to the first 200,000 cars sold. As Tesla is now passing that number the tax credit is disappearing. Other providers will still benefit from it. This puts the company at a price disadvantage. Granted when a Tesla costs over $100,000 it is not appealing to the most price-sensitive customer but when two cars are compared it may be the subtle advantage that causes Tesla to lose out.

When you read through the problems that have faced Tesla in the past, most of it comes down to unreliable suppliers or supply problems. Ford has been in the business for so long that its supply paths are well developed and seamless. Combining the two companies could solve a lot of issues for Tesla. 

The final reason this deal makes so much sense is that both companies have been very vocal about their ambitions in the self-driving space. By working together they could solve this solution and change the market.

While a Tesla Ford combination has not been spoken about by either company to date it makes too much sense for either company not to consider. If the move went ahead it would also give Elon Musk plenty of time to focus on other exploits and allow him to tick a box on Tesla for a job well done.