Tesla Motors, Inc.
) might become an acquisition target in 2014, if media reports
are to be believed. According to market speculation, one of the
"Big Three" Detroit automakers may purchase the electric
carmaker. One veteran trader reportedly said that
General Motors Company
) might acquire Tesla in 2014.
However, the news remains mere speculation as none of the
automakers have clarified these rumors. In fact, it is yet to be
confirmed whether Tesla CEO Elon Musk is willing to sell the
company. Moreover, the high valuation of Tesla is likely to prove
However, the acquisition of Tesla can be a good strategic move
for General Motors. While the latter is one of the largest
automakers in the world, it has not been very successful in terms
of selling electric cars. General Motors' Chevy Volt had sales
volume of less than 19,000 units in the first 10 months of 2013.
This implies a year-over-year decline of 3%. Moreover, the car
has been experiencing fire-related problems.
Meanwhile, Tesla's Model S car has been immensely popular. In
fact, the demand for the car exceeds supply despite no
advertising by the company. On the other hand, both General
Ford Motor Co.
), the manufacturer of Ford Focus Electric vehicles, spend
significant amounts on discounts to attract buyers. Yet, Ford's
electric car has monthly sales volume of less than 200 units.
Tesla currently has a Zacks Rank #4 (Sell), while General
Motors carries a Zacks Rank #3 (Hold). However, a better-ranked
stock in the automobile market worth considering is
Honda Motor Co., Ltd.
), carrying a Zacks Rank #2 (Buy).
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis
HONDA MOTOR (HMC): Free Stock Analysis Report
TESLA MOTORS (TSLA): Free Stock Analysis
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