Elon Musk Says Tesla Open To Merger With Legacy Automakers But Won't Attempt Hostile Takeover

Tesla Inc TSLA CEO Elon Musk said Tuesday the electric vehicle maker is open to merging with a legacy carmaker in theory but such a transaction would have to be friendly and not hostile.

What Happened: Musk made the disclosure in an interview with Mathias Doepfner, CEO of the German publishing house Axel Springer SE during a live event, first noticed on CNBC.

“I think we’re definitely not going to launch a hostile takeover,” Musk told Doepfner. “If somebody said, ‘hey, we think it would be a good idea to merge with Tesla,’ we’d certainly have that conversation. But we don’t want it to be a hostile takeover situation.”

The two executives were discussing a purely theoretical scenario.

Why It Matters: As of last month, Tesla’s valuation is greater than all the legacy automakers — including General Motors Company GM, Ford Motor Company F, and Fiat Chrysler Automobiles NV FCAU — put together.

Musk is reportedly also calling upon employees to take significant cost-cutting measures. The CEO described Tesla’s line of business as a “tough Game of Pennies” in a memo and warned employees that if they do not slash costs “[Tesla] stock will immediately get crushed like a souffle under a sledgehammer!”

Price Action: Tesla shares closed nearly 3% higher at $584.76 on Tuesday and fell 1.59% to $575.48 in the after-hours session.

Photo by Daniel Oberhaus on Flickr