Tesla, BMW to Team Up on Batteries, Lightweight Parts? - Analyst Blog

Tesla Motors, Inc. (TSLA) is planning to collaborate with BMW on batteries and lightweight components, per media reports. The alliance will involve the usage of Tesla's battery technology and BMW's carbon fiber technology for future car bodies.

The CEO of Tesla is also thinking of collaborating with BMW on charging stations. Earlier this year, Tesla was in discussions with BMW about the utility of charging stations for different types of electric vehicles. Tesla also plans to set up a battery plant in Germany in the next 5–6 years.

However, these plans are at the initial stages of development. At present, there is only one vehicle battery maker in Germany but that too is planning to close.

Tesla considers BMW's carbon fiber reinforced parts to be relatively cost-efficient. BMW uses carbon fibers produced from its joint venture with materials supplier, SGL to make reinforced passenger cell parts for its i3 electric hatchback and i8 plug-in hybrid sports car.

Earlier, Tesla also collaborated with other automakers including Toyota Motor Corp. (TM) and Daimler AG (DDAIF). In mid-October, Daimler sold its 4.3% stake in Tesla. However, the company affirms that it will continue to collaborate with Tesla, which will supply electric drive units to the former for the Mercedes B-class models and the electric drive mini-car.

In Mid Oct 2014, Toyota also sold its 2.4% stake in Tesla. Tesla used to supply battery packs for Toyota's RAV4 compact SUV. However, that agreement between the automakers has expired. Moreover, Tesla's CEO Elon Musk believes that Lithium-ion batteries used by Tesla are more efficient that fuel cell batteries.

Currently, Tesla carries a Zacks Rank #5 (Strong Sell). Gentex Corp. (GNTX), with a Zacks Rank #1 (Strong Buy), is a better-ranked automobile stock worth considering.