Tesla, the top electric vehicle maker, and Glencore, the mining company that is the world’s largest commodities trader, came up with an idea two or three years ago that would resurrect the spirit of Henry Ford: Tesla would buy a big stake in Glencore, a deal that would replicate the Ford Motor Company’s model of owning its supply chain.
The negotiations, which were acknowledged by neither side but mentioned in media reports, ultimately went nowhere for unknown reasons. Perhaps Tesla boss Elon Musk did not fancy himself a miner, a business alien to his tech fanaticism. Perhaps he considered the price excessive or realized that his ego would ensure clashes with Ivan Glasenberg, the hard-charging boss of Glencore at the time.
Whatever the case, Tesla’s exit from the deal now looks like a mistake – a big one. Tesla would have won in several ways if it had bought, say, 20 per cent of Glencore. Its investment would have tripled in value, since mining stocks have been on fire during a sensational commodities rally partly driven by rising EV sales; it could have used Glencore’s ample dividend stream (the yield is 6.4 per cent) to help purchase whatever it needed to make its vehicles; and, crucially, it could have locked up the supply of some of the materials essential for battery production, especially cobalt.
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