Tesla could be an attractive acquisition target for Google.
Taking into account Google’s current market cap of $1 trillion, the combined entity could be worth north of $2.5 trillion.
What Tesla would stand to gain:
Google’s software muscle and large cash pile increase Tesla’s chances of executing well in a larger space.
We outline a case with Google as Tesla’s parent. This could see Tesla grow 11x from its current market cap of close to $135 billion to $1.5 trillion by scaling its production and deliveries to about 8 million units (approaching Volkswagen & Toyota) while monetizing its self-driving technology more broadly by licensing it to other auto-makers.
Considering that Tesla stock jumped to almost $1,000 last week from ~$500 in less than ten days, and all of this after an already surprising rise from the lows of below $200 less than a year ago, we believe the outliers are not so difficult to imagine.