Tesla Motors Inc (NASDAQ:TSLA) unmatched success has been closely watched by many investors and experts including the two popular automakers Toyota Motor Corporation (NYSE:TM) and Daimler AG (OTCMKTS:DDAIF) (ETR:DAI) (FRA:DAI).
Both these automakers were one of the early investors in Tesla Motors Inc (NASDAQ:TSLA). Daimler AG (OTCMKTS:DDAIF) (ETR:DAI) (FRA:DAI) invested $50 million for a 10 percent stake in 2009 while Toyota purchased the $50 million worth of stock when the electric car company went public in July 2010.
We wrote about Ben Graham's activism at northern pipe line, but there are other interesting stories involving the father of value investing Value investing and activism go hand-in-hand. Benjamin Graham, the godfather of value investing, discovered how important it is to incorporate activism into a value strategy relatively early in his career, a strategy that Read More
How Tesla is helping
Tesla Motors Inc (NASDAQ:TSLA) with its state of the art energy management system could help both these automakers to speed up their electric vehicles segment, says a report from Joann Muller from Forbes. Daimler AG (OTCMKTS:DDAIF) (ETR:DAI) (FRA:DAI)’s smart city car already used a Tesla battery, and its Mercedes B-class EV, which is expected to launch in 2014, will be equipped with Tesla powertrain.
On the other hand, Toyota Motor Corporation (NYSE:TM) signed a $100 million agreement with Tesla Motors Inc (NASDAQ:TSLA) for the supply of electric motors, power electronics, batteries, gearboxes and software for its new $50,000 RAV4 EV. The SUV’s are manufactured alongside Tesla’s Model S sedan in a Fremont, Calif., factory. The factory, earlier operated by Toyota and General Motors Company (NYSE:GM), was sold to Tesla, in 2010, by Toyota for $42 million.
Both, Toyota Motor Corporation (NYSE:TM) and Daimler AG (OTCMKTS:DDAIF) (ETR:DAI) (FRA:DAI) recorded a decent return from their investment in Tesla Motors Inc (NASDAQ:TSLA) and more so after the company’s stock tripled this year. Apart from the return, Tesla has also helped the older companies to consider a more open approach to counter technological issues.
Tesla has also inspired the automakers with its sheer pace of growth. Sheldon Brown, executive project manager for the Rav4 EV told that the company made us think “are we too engrossed in our own culture?”
Also, after collaborating their methods, both Toyota Motor Corporation (NYSE:TM) and Tesla Motors Inc (NASDAQ:TSLA) were able to compare and improve their approaches to vehicle development.
Investment from Daimler, rated highly by Tesla CEO
The billionaire Elon Musk, considered the investment from Daimler much more important for the company than the $465 million taxpayer loan. The Daimler AG (OTCMKTS:DDAIF) (ETR:DAI) (FRA:DAI)’s investment came at a crucial point, when the company was on the verge of going under in 2008.
In an interview with Autoblog, in 2012, here is how Musk described the investment from Daimler:
“There were a couple of near-death situations. One is where I had to basically take all of my personal reserve capital in 2008 and invest that in Tesla…. I was totally tapped out……… and then, thankfully, Daimler………. invested $50 million into Tesla…… they put $50 million into Tesla at a time when they themselves were cash strapped….. When someone is hungry themselves and they give you a bit of food, you’ve got to be grateful for that.”