20 Daimler isnt the only traditional automaker to take an interest in Tesla

20 daimler isnt the only traditional automaker to

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20Daimler isn’tthe only traditional automaker to take an interest in Tesla. After Musk took thecompany public in 2010, Toyota bought $50 million (or 2.4 percent) of Tesla’s stock.21 With this deal,Tesla got ownership of the New United Motor Manufacturing, Inc. (NUMMI) automotive factory, whichit later purchased outright in Fremont, California. NUMMI was initially set up as a joint venturebetween Toyota and GM. GM withdrew from NUMMI as part of its bankruptcy reorganization in2009. Like Daimler, by the end of 2014, Toyota had sold some of its 2.4 percent stake in Tesla.22 bothDaimler and Toyota walked away with sizeable capital gains. In 2017, Toyota announced that it hadsold its remaining stake (1.43 percent) in Telsa.23In addition, Tesla managed to bring Panasonic, one of the worlds electronic giants, on board.Panasonic’saim is to combine its experience in battery technology with Tesla’s capabilities in elec-tric powertrain development. The goal for Panasonic is to become the number-one Green InnovationCompany in the electronics industry by 2018, the 100th anniversary of its founding.24 In addition tothe Gigafactory in Nevada producing battery cells, Tesla operates Gigafactory 2 producing solar cellsin a partnership with Panasonic in buffalo, New York. Mass production is expected in October of 2017.The U.S. Automotive Industry A Brief OverviewIn 2016, approximately 18 million cars, SUVs, and light trucks were sold in the U.S. Althoughthe total units sold is down from an all-time high of over 20 million units in the early 2000s, inrecent years, consumer demand shifted towards larger cars, SUVs, and trucks. This shift in demand isexplained by falling gasoline prices, from an average high of $3.68 per gallon in 2012 to $2.25 in 2016.With lower gas prices and an economy on the upswing, Americans favored the Ford F-Series and theChevrolet Silverado, making them some of the best-selling vehicles in 2016.The big Three automakersGM, Ford, and Chryslerhave dominated the U.S. automotive industryfor decades. GM was once the leading U.S. carmaker, with a market share of over 50 percent in 1962.by 2009, GMs market share had eroded to less than 20 percent, while the market share of the bigThree combined dropped below 50 percent for the first time ever.25 GM and Chrysler filed for bank-ruptcy, while Ford was fighting hard to become profitable again.GEnERAL MOTORS (GM)Given the sheer size of the U.S. automotive market, the oldGM concentrated mainly on its domes-tic market. GM once held more than 50 percent market share in the United States and was the leaderin global car sales (by units) between 1931 and 2007, before filing for bankruptcy in 2009. In its hey-day, GM employed 350,000 U.S. workers and was an American icon.6
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Tesla Motors, Inc.The new GM that reemerged 60 days after the bankruptcy filing had a significantly restructuredbalance sheet and four fewer brands (Hummer, Pontiac, Saab, and Saturn). To “bailout”the firm, the U.S.
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