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Red Smoke in the Stars

Red smoke in the stars: Tesla and Mercedes-Benz

Apparently, a merger between Tesla and Mercedes-Benz would give a lot to talk about. Especially that it would not be the German dinosaur eating the American startup, but quite the opposite. One could see red smoke in the stars.

Traditional German manufacturing meets U.S. tech startup

The German car manufacturer has been producing cars for almost 100 years. Everyone knows Mercedes-Benz over the world for its luxurious, well-built cars and gets brand recognition. What the Germans do best is manufacturing.

Tesla is a technology company that was established in 2003. It has managed to build a strong international image for producing electric cars only and for their autonomous driving technology. What Americans do best is software.

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Both companies have already done projects together. The most obvious one for the public is the purchasing of common parts for the cockpit. The Tesla Model S “uses Mercedes switchgear” and indicator stalk. Mercedes-Benz held Tesla shares for a while and brought a “Tesla powered” B-class to the market in 2015.

If both companies came together both could profit from each other. Tesla is very good at technology, especially software, and their engineers are highly specialized in optimization. This results in very efficient use of space in the cabin and efficient consumption of motors. Mercedes-Benz knows how to build cars with very high quality and has production sites all over the world.

Red smoke in the stars: Can Tesla really buy Mercedes-Benz?

Even if Tesla is a small light in terms of the total number of vehicles sold, in terms of stock market valuation Tesla shines brighter than the competition. The American company is worth around 934 billion U.S. dollars on the stock market, while Europe’s largest carmaker Volkswagen has a comparatively meager valuation of around 125 billion U.S. dollars. Mercedes-Benz on the other hand is with around 25.8 billion U.S. dollars.

What do you think?

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