Tesla, the automotive and energy company spearheaded by one Elon Musk, recently surpassed Daimler, Mercendes-Benz’ parent company, in market capitalisation. When the market closed on Tuesday, 4 December, Tesla’s valuation crept slightly above that of Daimler, despite the latter being a more historically well-established automotive company.
Naysayers, meanwhile, will be quick to point out that Tesla, unlike its many of its industry rivals, is not just an automotive company; it’s also a veritable energy empire, with its burgeoning Powerwall, Powerpack and solar panels division.
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Nonetheless, it’s an exciting moment for Tesla, particularly given the stature of the companies it’s competing against. Daimler, for example, started as Daimler-Benz back in 1926, and has been producing vehicles far longer than Tesla has, in addition to being profitable for much longer.
It’s a sign of the times, then, that Daimler’s profits have been in decline for a while. As consumers become more environmentally conscious, the move towards EVs has been marked. Daimler has taken tentative steps in this direction; in September 2017, the company announced a $1 billion (£785 million) investment in next-generation EVs. “That’s not a lot of money for a giant like Daimler,” tweeted Musk. “Wish they’d do more. Off by zero.”
Daimler, for its part, rose to the challenge: “You’re absolutely right,” the firm responded to Musk. “Here the missing zero: Investing >$10bn in nxt gen EVs & >$1bn in battery prod”.
The understones of frostiness are to be expected between two former partners; back in 2009, Tesla made a deal to supply battery packs for the electric version of Daimler’s smart car. The latter also invested $50 million (£39 million) in Elon Musk’s automotive and energy firm, back in the days Tesla was strapped for cash.
For now, it doesn’t seem as if Daimler’s renewed, ahem, drive towards EVs has had much of an impact, with Tesla surpassing its old-school competitor on the stock market. But with Mercedes’ first EV, the Mercedes-Benz EQC set to start production next year, perhaps Tesla should hold onto its hat. Stay tuned.
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