Elon Musk would consider leveraging Tesla’s mega $554 billion market cap to buy a legacy automaker, but only if it was on friendly terms, the billionaire entrepreneur said Tuesday in a wide-ranging interview with Axel Springer CEO Mathias Döpfner.
Musk who received an award Tuesday from the media giant discussed his various interests and businesses, notably SpaceX and Tesla, both of which he leads.
Döpfner noted that Tesla’s valuation far exceeds the market cap of incumbent automakers like BMW, Daimler and VW, which along with others in the industry once dismissed Musk’s ability to make electric vehicles mainstream. When asked if it would be a serious option to buy one of the legacy automakers, Musk said it was possible, but only under certain conditions.
“Well, I think we’re definitely not going to launch a hostile takeover,” Musk said. “So I suppose if there was a friendly one, if somebody said, ‘Hey, we think it would be a good idea to merge with Tesla,’ we certainly have that conversation. But, you know, we don’t want it to be a hostile takeover sort of situation.”
Tesla today sits in an enviable position — although Musk said once again that its share price is too high. The company, which will join the S&P 500 Index on December 21, is now the most valuable automaker in the world, surpassing rivals that produce far more vehicles annually.
Investors have sunk money into Tesla shares largely because they view it more as a technology company than an automaker, even though the vast majority of its revenues today come from car sales.
Musk noted that automakers largely dismissed Tesla in its early days.
“When we first unveiled the Roadster in 2007, I mean, it was just basically, they just said, Oh, well, you’re basically a bunch of fools,” Musk remarked, adding that rivals are now far friendlier than the past.