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Tesla Open To Merger With Traditional Automaker – Should It Be Ford?

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The automotive industry’s unprecedented transition towards full electrification probably wouldn’t be occurring so quickly if Tesla hadn’t disrupted the market with vehicles like the Model S. Tesla’s first-mover advantage has prompted Wall Street to reward the company with a massive market valuation, which currently stands at a little over half a trillion dollars. It is undoubtedly the most valuable automaker at the moment, and if it wanted to, it could easily merge with a legacy automaker. Tesla CEO Elon Musk hinted at the possibly in a recent interview.

A theoretical merger with a more established automaker could benefit Tesla immensely. It would also come with its own set of problems. And there are automakers, like Ford, who could use more help getting their electric vehicle programs in order.

Mach-E Production

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To be fair to The Blue Oval, the company is taking reasonable steps towards full electrification. The 2021 Mustang Mach-E promises to be quite competitive with the Tesla Model Y in terms of battery range, price, feature content, and performance. Ford has also partnered with Volkswagen for a future EV that will use VW’s MEB electric vehicle architecture. Plus, The Blue Oval is also working with EV startup Rivian on an upcoming EV.

But other automakers are currently much further along in the EV programs than Ford. General Motors already has its short and long term EV plans scoped out, with the Ultium modular battery technology serving as the basis for a series of products, including the upcoming 2022 GMC Hummer EV. GM is also converting its Detroit-Hamtramck facility into a dedicated EV manufacturing center and should be able to scale production up to formidable levels within the next several years.

On the other hand, Ford is ahead of several of its biggest competitors when it comes to EV development. Fiat Chrysler Automobiles, which will soon merge with French automaker Groupe PSA to make Stellantis, has only dipped its toes into electrification. FCA currently offers partially electrified vehicles like the Chrysler Pacifica PHEV and will soon offer a similar treatment for the 2021 Jeep Wrangler, but it has not invested the capital necessary for a large-scale EV rollout. FCA’s future corporate partner, Groupe PSA, has only just started to embark on constructing a dedicated EV platform.

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Meanwhile, other companies have previously devoted a significant amount of resources to EV programs that still need help. Nissan, which sold the Leaf years before its rivals offered anything remotely comparable, is struggling to right itself after the current COVID-19 sent it into into a loss-making spiral. It could use a partner to ease the financial burden associated with electrification.

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In each of these cases, Tesla would instantly gain access to an organization with decades of production experience, not to mention a host of assembly plants and facilities that could potentially be converted to manufacture electric vehicles. The company would also gain a substantial dealer network, whether for sales, service, or parts.

Tesla could potentially build more vehicles at a quicker pace, offer them for sale in more locations, have more physical space devoted to servicing those vehicles, and possess the resources necessary to informing the public that those products exist.

The major drawback for Tesla would be all the baggage that comes with a traditional automaker like Ford. EV technology isn’t remotely suitable for something like the Ford Super Duty lineup, at least not at the moment, and the start-up would have to contend with keeping at least some internal combustion in production for the time being.

Ford would stand to greatly benefit by gaining advanced EV technology, but it would also be compelled to work with a company that is not interested in vehicles powered by internal combustion engines. And there’d be a power question involved with the deal as well. Tesla’s market valuation makes it formidable, but Ford is a physically larger company with a solid track record of making money. Who would call the shots, Tesla CEO Elon Musk, or Ford CEO Jim Farley?

The question remains: should Ford seek out a merger with Tesla? There’s no easy answer, but a potential working relationship between the two companies would unquestionably benefit Ford’s nascent EV efforts. Beyond that, the merits would be dubious. And it all depends on the buying public’s receptiveness towards EVs, which is still a big unknown, despite growing popularity and expectations of exponential growth in the not-too-distant future. For now, we’ll all just need to wait and see what happens.

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Written by Edward Snitkoff

Ed owns a 1986 Ford Taurus LX, and he routinely daydreams about buying another one, a fantasy that may someday become a reality.

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10 Comments

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  1. A Ford – Tesla merge would be beneficial to both companies. Ford can help Tesla enter the truck market and Tesla can help Lincoln build luxury EV sedans and let Ford be the Truck, SUV company with a stand alone Mustang. Tesla CEO Elon Musk needs to call the shots, Farley can have more time for his racing hobby, as long as Ford family keep control of Ford

  2. Ford doesn’t seem to be interested in mergers at all. They’re an ‘absorb/cooperate-or-get-out’ company, and I respect them for that.

    Remember the VW/Ford partnership announcement? Ford was adamantly against any form of a merger, making sure that it would simply be information/skill sharing between companies. Rivian is being funded by Ford to help develop EV platforms, and I wouldn’t be surprised if they get absorbed and become some sort of boutique sub brand under Lincoln, like Hummer for GMC.

    Tesla with Musk at the helm is too volatile to entice merging with a legacy automaker anyway, especially one with as little EV desperation as Ford. The entire company just operates in a way that legacies are rightfully afraid to.

  3. To be honest, I’m not really for it, but I’m not 100% against it either. Putting aside my absolute disdain for the founder of the Company, my overall feeling is that Tesla will try to take over any situation that it is in partnership with and become a parasitic leach, eventually killing it’s host. Okay so maybe I didn’t put aside my utter contempt for Tesla and E.Musk but that’s how I feel. Tesla has decent products with their power sources and things like that but overall I don’t feel that Ford really needs to partner with them.

    What I do think would be beneficial for Ford would be to really think the process through with it’s electric brand before moving forward with more models. The commercial E-transits and electric parcel vehicle I think will do well globally but I’m talking more about the general consumer vehicles. GM has shown us that Diesel engine are now absolutely obsolete with the introduction of the 1,000hp/11,500lb-ft torque Hummer. Those are numbers of absolute insanity and should put every single diesel manufacturer on edge. If Ford were to make an electric powertrain like that and mate it to an E-DCT unit that would leapfrog it past what GM has done, Not only could the Diesel super duty become extinct but Ford could comfortably return to the heavy duty truck industry with proper product timing and placement if they could get to market before companies like Volvo, MACK, International, etc got involved or Tesla gets there first and screws everything up. A setup with that much HP plus a few in-wheel electric motors would really give Ford a sold place in the medium and heavy duty market especially since dual-tire setups can be replaced with super single wheel and tire packages to help with load weight dispersing. A high horsepower electric setup like that could also be used in a Ford Excursion pickup and SUV to rival the new GMC Hummer and replace the aging Ford expedition. What makes the Ford version better would be the multi-speed E-DCT. Bringing out an all-electric Ford Atlas pickup to replace the F150 would be a great idea as well. My reasoning for suggesting the replacement of the F150 is that this should be a different truck altogether. A better truck in every sense of the word. Now, anyone who has ever read any of my other posts knows that I am a true Ford Performance aficionado with a love for the Ford Performance vehicles of Europe and Australia. When it comes to the future of Electric Performance cars Ford has once again produced beautiful concept vehicles but did not execute bringing them into production and now would be a perfect time to do so. Ford Produced the Mach E performance crossover which is no more a mustang than a Winnebago is a space ship or than a 4-wheeled cuisinart (AKA Tesla) can match space ball’s one ludicrous speed and go straight to plaid (yeah that happened just now). While the name Mach E is absolutely fine, dropping the Mustang name from the vehicle would do wonders. What would also do wonders is removing the “Frunk” and putting a different electric powertrain setup under the hood with a 10-speed E-DCT behind it driving the front and rear axles and bumping the power up to rival Tesla’s Model-S P100D Ludicrous and Plaid models. Ford has already shown that the Mach E is capable of being a performance vehicle with that amazing looking RTR 1400 variant but a true production performance variant needs to be made, collaborating with Roush and maybe even RTR to create a wide-body Mach E that would be a little more toned down that the rambunctious RTR version but way more exciting than the regular Mach E GT. The good thing is the Mach E can take over the places where the Ford Escape and Ford Edge reside and with different trim levels it easily fills the void of both vehicles’ shoes. Under that, Ford should definitely bring out the Mondeo EVOS, making almost exactly like the concept and having that as the vehicle that is still defined as a crossover but fills what was going to be the Focus active and Mondeo active vehicles with an electric vehicle that brings major performance models along with it. As far as cars are concerned, Ford is currently left with the Mustang and honestly it’s time to let it go and bring out something new. I am a huge fan of the Ford Falcon but a few years ago, Ford Australia made a concept car called the Mad Max Interceptor coupe. The actual interceptor from that movie was in fact a Falcon coupe and concept car fits into that mold perfectly. While the concept is more of a 2-seater concept, this design on a BMW 8-series sized performance vehicle (obviously tweaked a little bit) would be a perfect electric performance car replacement for the Ford Mustang and with a name like Interceptor, it already screams performance. Taking a car like that with suspension technology from the Ford GT supercar, a high performance electric powertrain with an E-DCT transmission, AWD, torque vectoring electric motors and differentials and things like that, you have electric vehicles that appeal to enthusiasts who wouldn’t mind electric vehicles as long as they have that engaging feel to them. Speaking of engaging, Ford needs to come out with an “Exhaust” for it’s performance electric vehicles. Obviously, without an internal combustion engine, there are no exhaust fumes to exit the car along with the fact that there is no exhaust sound. Anyone who follows what’s going on with electric vehicles knows that it will be mandated soon that electric cars make some sort of sound to alert pedestrians of their presence. My thought would be to have a sound system that is shaped and sized like a muffler placed under the trunk of the car with tuned sound tubes exiting out of the back of the vehicle through the rear fascia giving the look of a performance exhaust system along with a more organic sound that would move with the RPM and shifts of the car. Obviously, these cars are not V8 muscle cars or anything like that so they should not sound like them. The sound should be deep without that weird high pitched sound blended in with a decibel rating of anywhere between 78 and 80db at idle with full throttle reaching around 88db which will give enthusiasts the feel of having a performance exhaust note and give performance cars a bit more character. I would say non performance cars should be right around 55DB which gives them enough sound to alert pedestrians without being overly loud. Drop Lincoln, add the black label and vignale trims to Ford models above the Limited, make the ranger and bronco electric and make the ranger more truck like and that’s about it.

  4. Sorry, Ford fans. Tesla is putting all the legacy automakers, including Ford, out of business. Tesla has nothing to gain by merging with Ford.

      • no, I think they mean that with the current production levels and quality of vehicles proposed by legacy auto, that L.A. won’t be able to transition in time to keep up with Tesla and other newcomers, Tesla is clearly trying to transition into the economy niche and that will give room for Lucid to take on Lexas and Porche, and Jaguar more luxury cars than even tesla offers, and Rivan might take the utility and large vehicle market. I think Legacy Auto will be replaced not by just Tesla but by at least half a dozen newcomers, I think only Hyundai and two others will survive, but I doubt Ford or GM will.

  5. The only electric vehicles that will ever haul my backside anywhere is on rails. Even train locomotives have a diesel engine turning the generators driving the steel wheels. I’d never purchase an electric vehicle from Ford or any other company.

  6. I don’t think tesla needs Ford’s assets, but I think that purchasing Ford would really help justify the current share price to investors and possible future investors. Plus, while most of the machinery Ford has will be worthless, the land value and supply chains alone will be worth their weight in gold, Tesla won’t have to go through the berlin shutdowns again as they will have the land preprocessed.

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