Tesla Inc TSLA CEO Elon Musk was asked a question about future acquisitions for his electric vehicle company while campaigning for former President Donald Trump in Pennsylvania over the weekend.
What Happened: An attendee at a Trump rally in Pennsylvania asked Musk why Tesla has not considered buying Rivian Automotive RIVN,
As reported by Teslarati, Musk said, "I wish them the best.”
“I hope they do well,” Musk added, shared by Sawyer Merritt on X. “The car industry is a very difficult industry. There's only two U.S. car companies that haven't gone bankrupt and that's Ford and Tesla. Rivian's going to have a hard time. It's insanely difficult to compete in the car industry. If it were not for two technology discontinuities, one being electrification and the other being autonomy, I think Tesla could not succeed without solving both.”
Based on the comments from Musk, it looks like an acquisition of Rivian is not a consideration. Tesla has often limited its acquisitions to companies that help with technology or the supply chain of the company's electric vehicles.
You may not be a billionaire like Elon Musk, but you can uncover hidden gems in the stock market using our proprietary data and pattern recognition — check out five stocks flying under the radar that deserve your attention.
Why It's Important: Rivian is one of the many companies competing with Tesla in the electric vehicle space. Rivian's electric pickup trucks have been well received by consumers and have sold well.
The main problem for Rivian, and many of Tesla's competitors, isn't the demand side, but rather the cost side as the company struggles financially to make vehicles and maintain profits.
Rivian is working on boosting production and improving costs ahead of the release of its R2 vehicle in 2026.
A joint venture with Volkswagen VWAGY is also helping boost the company's financial state with up to $5 billion committed to Rivian.
Musk has said Rivian and Lucid will face bankruptcy many times over the years. Musk said in February 2024 that Rivian likely had only six quarters before they would go bankrupt. The Tesla CEO later put doubt into Volkswagen being able to invest the full $5 billion in Rivian to help the company.
With a market capitalization of $10 billion, Rivian could easily be bought by the larger Tesla, a move that would transform the electric vehicle market further. Based on Musk's comments, the CEO is just fine watching the competition struggle and as he predicts fade out with bankruptcy.
Price Action: Rivian shares trade at $10.00 Monday versus a 52-week trading range of $8.26 to $24.62. Rivian stock is down 52% year-to-date in 2024.
Read Next:
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
