What a Tesla Collaboration with BMW Might Actually Mean

BMW i8
Source: courtesy of BMW
In an interview published Sunday in a German magazine, Tesla Motors Inc. (NASDAQ: TSLA) CEO Elon Musk said that he is talking with BMW about an alliance that would involve Tesla’s battery technology and BMW’s use of carbon fiber technology in making car bodies.

In mid-October Daimler AG sold its 4.3% stake in Tesla and Toyota Motor Corp. (NYSE: TM) also sold part of its 2.4% stake in the company. Tesla will continue to supply electric drive units to Daimler for its Mercedes B-class models and the company’s “smart fortwo” electric drive mini-car.

Tesla’s relationship with Toyota is slightly bumpier. Toyota has put a lot — if not quite all — its eggs in the fuel-cell basket. The company plans to begin selling the $57,500 Mirai in California in the fall of 2015. An agreement between Toyota and Tesla under which Tesla supplied battery packs for Toyota’s RAV4 compact SUV has been phased out. To top it off, Tesla’s Musk never misses a chance to speak out against fuel-cell technology, calling it “extremely inefficient” when compared with battery-driven devices like the Model S sedan from Tesla.

BMW’s i3 all-electric has a limited range of just 115 miles, compared with the 275-mile range of the Tesla Model S. Boosting the range of its i3 and its i8 sports car could give the company a boost in its battle with Daimler, which may be looking into the next decade before it can have an all-electric B- or C-class model on the road.

Musk also told the German magazine that Tesla expects to have a battery plant operating in Germany in five to six years. There is currently just one vehicle battery maker currently operating in Germany and it is looking to close its doors.

This round of news is interesting when you consider that Elon Musk previously said that there was room to improve on the i3. He was quoted saying he did hope they improve it, so maybe Musk is the one who can.

Tesla’s stock traded down fractionally Monday morning at $242.61 in a 52-week range of $116.10 to $291.42.

ALSO READ: Volkswagen to Invest $108 Billion in Expansion

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.