GM to Buy Tesla in 2014?

Tesla Model S 1 photo
Photo: Tesla Motors
Although General Motors is busy shutting down operations in Australia and withdrawing most of Chevrolet from Europe over the next few years, word has it the Detroit-based company could acquire Tesla Motors by the end of 2014.
According to veteran financial analyst Yra Harris of Praxis Trading, Tesla Motors may be sold to General Motors sometime this year. Speaking to CNBC, Harris said GM is likely to consider buying Musk’s company instead of trying to come up with a successful rival for the popular Model S all-electric sedan.

However, things are not as easy as they sound, as Tesla’s current market capitalization is of more than $18 billion, with shares trading at “a hefty 100-plus times forward earnings”, USA Today reports. All told, buying Tesla Motors would put GM at a great financial risk.

Last month, the US Treasury sold off the last of its remaining shares in General Motors, while the Detroit manufacturer sold its entire seven percent stake of shares in PSA Peugeot Citroen.
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About the author: Ciprian Florea
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Ask Ciprian about cars and he'll reveal an obsession with classics and an annoyance with modern design cues. Read his articles and you'll understand why his ideal SUV is the 1969 Chevrolet K5 Blazer.
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