- A German magazine reports Volkswagen’s CEO is interested in a Tesla investment.
- High-level aides to the executive told Manager Magazine that Volkswagen has the cash, but convincing shareholders would be tough.
- Shares of Tesla rose more than 2% in early trading Thursday following the report.
- Volkswagen has denied the report as “pure speculation.”
- Visit Business Insider’s homepage for more stories.
Volkswagen CEO Herbert Diess has privately expressed interested in taking a stake in Tesla, according to a report in Germany’s Manager Magazine on Thursday.
“He would immediately get on board if he could,” an unnamed, high-level source said, adding that the cash is on hand, but getting approval from major shareholders could be tough. The Porsche family owns a 52% majority of Volkswagen, followed by the German state of Lower Saxony with a 20% stake.
Tesla’s stock, meanwhile, surged in early trading Thursday following the report. Shares surged as much as 2.5% ahead of the market’s opening in New York.
Another source, a banker with knowledge of Diess’ thinking, confirmed to the Magazine his thinking, but said he believes buying Tesla outright would be too expensive at its current market value of nearly $40 billion.
The two CEOs meet twice a year, the magazine reports, and Diess is constantly reminding his staff of Elon Musk’s advantages over the traditional automaker.
A Volkwagen spokesperson later denied the report, telling CNBC: “It’s completely unfounded. It’s pure speculation.” Tesla’s stock pared some of its gains after the denial, but still opened about 1.6% in the green at 9:30 am in New York.
Increasingly, global car makers are trying to combine forces to mitigate the high costs of developing new electric and autonomous technologies; compete with new entrants such as Waymo, Uber, Lyft, and Tesla; and seek growth in markets such as China.
Volkswagen, for its part, has been making investments in other Silicon Valley firms in order to stay ahead of the curve. Diess in March denied seeking a minority stake in Waymo, the self-driving firm owned by Google, but in July penned an agreement with Ford to cooperate on autonomous and electric vehicles.
“Looking ahead, even more customers and the environment will benefit from Volkswagen’s industry-leading EV architecture,” Diess said in a at an event in New York at the time the deal was announced. “Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate.”
Sophia Ankel assisted with translation from London.