Tesla's M&A strategy is similar to Apple's
1. In terms of mergers and acquisitions, Tesla, like Apple, adopts a small transaction strategy for Acq-hire.
2, car mass production - > autonomous driving AI - > battery manufacturing Through this strategy, Tesla has absorbed technology and talent in areas that are important to the business but difficult to develop.
3. Under this small transaction strategy, Tesla's large-scale automotive OEM mergers and acquisitions are temporarily difficult to predict.
Big Tech Big Deal News:
Why is Tesla quiet?
Last month, news of Microsoft's acquisition of Activision Blizzard caused a sensation in the IT industry. I was twice amazed at the fact that the entire acquisition was paid out in cash for up to $68.7 billion. It's not uncommon to see the "big deals" of these big U.S. tech companies. If you look at Microsoft alone, it bought Skype for 10 trillion won in 2011 and LinkedIn for 30 trillion won in 2016. Game developer Bethesda Softworks was also acquired in 2020 for 8 trillion won. Facebook bought Instagram for 1 trillion won in 2012 and Oculus in 2014 for 2.5 trillion won. Google also acquired Looker for $3 trillion in 2019 and Fitbit for $2 trillion in 2021. Every year, we hear hot news about the ever-expanding size of big tech companies through trillions of mergers and acquisitions. On the other hand, tesla, which ranks fifth in the United States by market capitalization, has been quieter than expected.
Why is Tesla's M&A news so quiet?
What companies has Tesla acquired?
"We're primarily interested in small, innovative companies that develop technologies that complement Apple's products." —Tim Cook
Tesla is often likened to "the Apple of the car." In fact, Tesla's M&A strategy is very similar to Apple's. So, I want to talk about Apple before Tesla first.
Apple's M&A strategy is represented by one word: "Acq-hire." Acquire is an abbreviation for "Acquire" and "Hire". In a word, it is a merger and acquisition aimed at absorbing talents.
Unlike the aforementioned "big deals" of Microsoft, Facebook, and Google, Apple is pursuing a "small deal" strategy that focuses on Achilles heel. It is to recruit developers from companies that are able to enhance the technical capabilities of new businesses as well as existing businesses that Apple is developing. Apple's strategy is to solve problems that are difficult to develop directly and to accelerate technology development in this way. In fact, in 2012, Apple accelerated the development of fingerprint recognition technology by acquiring a company called Authentec, and in 2018, it acquired a company called Texture to create Apple News. Many of the features users use on their iPhones are based on mergers and acquisitions.
The target companies are very small, and Apple also keeps the acquisition process secret, so it is difficult to find information about Apple's merger in the media. In fact, apple has been steadily and frequently acquiring a company every three or four weeks, according to CNBC. Tesla is no different from Apple. Aside from the acquisition of SolarCity, it's hard to find a precedent for Tesla's merger to make headlines. Even the takeovers are not well reported, and even after reporting, they are often silently buried. First of all, it's hard to know what the acquired company is doing just by looking at the name of the company, and even if you search, in many cases the website won't appear.
Tesla, like Apple, mainly conducts small mergers and acquisitions for the purpose of acquisitions. Except for the controversial SolarCity acquisition of "Tiqin", most of them are acquiring small and medium-sized companies to attract talent and technology.
Here's a brief list of companies Tesla has acquired so far.
Tesla has acquired more than 10 companies, from stamping equipment maker Riviera Tool in 2015 to Battery Anode Materials Technology startup Sillion in 2021. Interestingly, like Apple, Tesla doesn't often disclose the exact facts of its mergers and acquisitions. It wasn't until three years later that the acquisition of Compass Automation in 2017 was confirmed. The 2021 acquisition of Spring Power is also a reasonable guess based on Tesla's low-priced acquisition of the company's technology patents, which has never been officially announced by Tesla.
In doing so, Tesla wants to keep the specific amount and details of the merger, as well as the deal itself, confidential. However, similar to Apple's attempt to solve the technical difficulties through Acquire, the list of mergers and acquisitions can infer which areas Tesla is interested in and what problems it has encountered.
What companies has Tesla acquired?
2015-2017
Committed to ensuring mass production technology for automobiles
In preparation for the mass production of the Model 3 that began in 2017, it seems
Since 2015, Tesla has focused on securing mass production technology.
In 2015, the first acquisition was initiated with the acquisition of stamping parts manufacturer Riviera Tool. Stamping is a technique that molds automotive steel sheets into the desired size and shape. I think the first acquisition in 10 years since its founding in 2003 meant that Tesla felt limited in its capabilities or faced an urgent and important problem.
In 2016, it acquired the German automaker Grohmann Engineering. In order to achieve the goal of "making machines", it was acquired in Germany, the home of automobile manufacturing.
In 2017, it acquired Perbix and CompassAutomation, which produce process automation equipment. While experiencing the model 3's difficulties in mass production, Elon Musk himself eventually acknowledged that there were limitations to process automation, but it seems that Tesla was serious about automation, so much so that it aggressively acquired these and other companies to overcome the difficulties.
The Compass Automation web page is now disabled
In 2016
The merger with Solar City, a controversial issue
The 2016 acquisition of SolarCity for $2.6 billion was the only deal that differed from Tesla's micro-merger strategy. That's why it caused a lot of controversy.
Acquisition year category company name 2016 Solar System Solar City
SolarCity is a manufacturer of rooftop solar generators founded by Elon Musk's cousins Lyndon Live and Peter Live. Elon Musk has made a case for seamless vertical integration of eco-friendly energy production, storage and use through mergers. However, when solar city was at risk of bankruptcy when it was learned of the merger, Elon Musk was sued for breach of trust. It is not known whether he bought Sun City with Tesla to save his cousin. Lawsuits relating to Sun City were not closed until recently and continue to be controversial.
Tesla's blog still retains the Solar City merger statement
Forrest Iandola, CEO of Deep Scale
In 2019
Artificial intelligence, autonomous driving
In 2019, artificial intelligence companies finally appeared on Tesla's merger and acquisition list. DeepScale is said to have the technology to achieve high-precision computer vision technology using a low-power process. Forrest Iandola, CEO of Deep Scale, will join Tesla's senior machine learning scientists.
From this time on, the outside world knew that Tesla was trying to use computer vision to achieve automatic driving. By hosting events such as Autonomy Day and AI Day, we have also widely publicized our specific autonomous driving technology development plan. But I don't know if it's because Tesla is very good at artificial intelligence (?). ）
2019-2021
Only the battery remains
One of Tesla's most frequent and recent mergers and acquisitions is batteries. On Battery Day 2020, Tesla officially announced that it will begin internalizing batteries. Around Battery Day, Tesla made as many as five battery-related mergers and acquisitions. Nearly half of the 11 mergers and acquisitions were related to batteries. It is safe to guess that this number will tell us that Tesla is focusing on battery technology innovation to the point where it faces difficulties.
In 2019, we acquired Maxwell Technologies, which has dry electrode battery manufacturing technology, and Hibar Systems, which has high-speed battery production technology. Dry electrodes were also introduced at the Battery Day event as a technology that can increase productivity by shortening the coating process in the battery manufacturing process.
ATW Automation, acquired in 2020, is a German manufacturer of battery modules/packages. It is a subsidiary of ATS and supplies batteries and transmissions to BMW and Daimler. At the time, it was speculated that the parts manufacturer, which was in financial trouble due to Corona 19, had acquired at a low price in terms of technology/manpower absorption.
In 2021, we will acquire Spring Power, which has the technology to produce environmentally friendly anode materials, and Sillion, which has the technology to produce silicon anode materials. Like the dry electrodes described above, silicon anode material is expected to be used in 4680 batteries, raising expectations. The reasons for the delay in mass production of the 4680 may have something in common with the reasons for continued mergers and acquisitions in the battery field.
Tesla's acquisition of large automotive OEMs won't last a while
Of the 11 companies we've talked about, with the exception of SolarCity, you've probably never heard of them before the merger. To this extent, Tesla, like Apple, focuses on small mergers and acquisitions, with a focus on the merger of technology and talent. With that in mind, the occasional rumor that Tesla is buying big car OEMs is unlikely to become a reality in the next few years. When Tesla, which absorbs only the necessary technology and manpower, absorbs the auto OEMs, can it easily reorganize the excess business and manpower that it feels unnecessary? Given the backlash from workers united by existing unions and the cost of exiting duplicate/excess business, it will start to hurt. At most, you probably have more stuff to throw away than what's left after you've paid a lot of money.
In addition, as of 2022, Tesla is at a technological leading position in the development of electric vehicles and self-driving cars. Traditional OEMs are chasing and replicating technologies that Tesla has already developed and mass-produced. With that in mind, the technology and manpower that traditional OEMs have first may not be enough to entice Tesla to pay huge fees.