NEW AUTO WORLD
On May 19 at 655am Daimler and Tesla hosted a joint press conference announcing Daimler's investment of $55MM for 9%+ of Tesla Motors plus options to buy more in the future.
(autobogGreen: http://www.autobloggreen.com/photos/daimler-tesla-press-conference/2024336/)
In addition to these basic terms (above).....
Daimler gets: 1 board seat (board is currently at 6, it is not clear if this is 1/6 or 1/7) and access to the Tesla EV system immediately
Tesla gets: access to Daimler's supply chain pricing and engineering expertise over time
Both (unofficially) get access to the US DOE loan of $350MM for Advanced Vehicle Manufacturing....not official yet.
I am happy for Tesla, but skeptical of such a deal for a couple of key reasons. Given Tesla's ambitions and business plan to develop "super efficient electric vehicles" (from the website), it seems that this money is enough to develop their next Model S, but not enough to develop a Company in the way they have panned to build it. Similarly, for Daimler, this is a cash outlay, in a time much desirous of precious cash, into a Company whose only significant asset is their electric system (motor and controller and pack), which arguably could be obsoleted by ten Companies already out there in the market.
I believe that there is more money for Tesla to need to raise in the future, and more investments for Daimler to need to make. For both, this deal really seems to buy time and excitement, but not a strategic end in and of itself.
At least both agreed that lightweighting is a critical path to be taken in the future.
I do not mean to sound negative, as this is a major valuation landmark in the auto market and Tesla has once again led the way. I am compelled, however, to share the overall summary of the deal as I see it.
As always, I am happy for questions and thoughts.
Watch the conference here:
And PLEASE give all of us your thoughts in this poll.
OLD AUTO WORLD
This news just in - GM into Bankruptcy on Monday (US, Canada, and Union to own the reorganized Company):
The Obama Administration expects to take General Motors into Chapter 11 bankruptcy Monday and quickly get the carmaker out with $30.1 billion in bankruptcy financing, the White House said in a statement tonight [Sunday Night].The federal government will have the right to replace GM's current board of directors with its own trustees, except for one director who will be picked by the Canadian government and another selected by a UAW-administered retiree health care trust.
But the White House vowed to exercise its ownership stake in GM "in a hands-off, commercial manner." That is, to let it operate as a car company, not a government agency.
The Obama administration said it didn't intend to provide funding beyond the $30.1 billion in bankruptcy financing. The government has already assisted GM with $19.4 billion since late December.
The $30 billion will give the government a 60 percent stake in a reorganized GM. The governments of Ontario and Canada will provide another $9.5 billion in financing to GM for a 12 percent stake in the new GM.
(from David Barkholz at Automotive News)