Volkswagen denies it's buying Tesla

Things were looking rosy for controversial American electric-car maker Tesla yesterday as rumours spread that it could be a takeover target for the world’s largest car-maker.

Tesla shares jumped two per cent yesterday after a report from Germany that Volkswagen was interested in buying either shares in or spending around €30 billion to buy the entirety of Tesla.

Then its shares dropped straight back down again when a spokesman for Volkswagen’s CEO, Herbert Diess, quickly hosed down the speculation, linked to a mistranslated report in a German management magazine.

“The speculation about buying a stake in Tesla made by Manager Magazin is without merit,” a Volkswagen spokesman insisted in a written response to questions yesterday.

The report, without quoting Volkswagen Group CEO Dr Herbert Diess, used “inside sources” at Volkswagen to suggest Diess thought the company could leap its EV technology forward using Tesla’s batteries and software.

This flies in the face of Volkswagen’s multi-billion euro commitment to modular prismatic battery cells while Tesla uses relatively old technology cylindrical cells sourced exclusively from Panasonic.

It was a welcome distraction for Tesla, though, as it struggled to cope with a stinging lawsuit from US retailer Walmart over seven stores burning down from fires traced to the Tesla-installed solar power systems.

Infamous Tesla-supporting website Electrek jumped on the Volkswagen-buyout bandwagon, citing Diess as saying he was open to investing in Tesla.

Diess has gone on record as admiring the achievements of Elon Musk’s company, but that is a long way short of wanting to buy a stake in the company.

“We think we will stop Tesla worldwide, because we are faster in scaling and we are faster in ramping up on three continents and we think we can keep up the pace in the development,” Dr Diess told carsales.com.au at the launch of the Polo two years ago.

“It will be tough because Tesla is terribly fast in doing things, also updating his electronic architecture is good. Our strengths are running global platforms, a stronghold in China.

“I think Elon is much more advanced in the connected world. You always look at the car regarding the drivetrain, and with Tesla it’s only OK, and GM’s drivetrain is ok.

“When it comes in to the architecture of the car, from the assistant systems in the car, Elon will develop much faster than the competitors.

“He has more cars in the road, he does faster updates and he develops very quickly.”

Oddly, the figure of €30 billion quoted by a banker close to Volkswagen would be a massive discount on current share pricing. With the absorption of $US10 billion in debt, it would effectively price Tesla at $US105 a share, down from the $US223 it traded at yesterday.

It wouldn’t be the first time Tesla had attracted interest from a major car-maker, with Toyota owning a share of the company before divesting in 2017.

Daimler paid $US50 million for nine per cent of Tesla in 2009, then sold its stake in 2014 for $US780 million.