I wonder if we are talking with Tesla yet? Sanford Bernstein:...

I wonder if we are talking with Tesla yet?

Sanford Bernstein: "With a market cap around $800B Tesla could buy almost anyone, however, there are several reasons that make a major acquisition unlikely. Instead we think partnerships /minority investments/supply agreements could achieve the same end goals just as Apple uses TSMC to make all of its processors today. Furthermore no precedent exists, disruptive companies like Apple and Netflix have never made an acquisition >1% of their market cap, let alone "legacy" assets. VW could be suitable manufacturing JV partner given it’s huge global production and a service network, the company being all in on EVs and in desperate need for software know-how. While acquiring an incumbent battery maker could bring meaningful capacity and manufacturing capabilities, it would carry significant risk in execution and potential alienation against other suppliers. Tesla also seems intent to develop batteries in house. That said, acquiring battery technology innovators may make more sense for Tesla to diversify/develop a new path with technology such as silicon anodes, or even solid state. The largest commodity constraints are in Lithium, Cobalt, Graphite and Nickel. Tesla appears to have a plan for Lithium and a streaming or pre-purchase agreement makes most sense for Cobalt. For graphite synthetic capacity could obviate the need or a low cost acquisition but Nickel is trickiest as there are no pure plays. Tesla could help finance new Class 1 nickel supply, or form a streaming agreement. If Tesla are to sustain the 50% growth necessary to justify valuation, removal of such bottlenecks will be key"