Is General Motors Interested In Purchasing Tesla Motors Inc (TSLA)?

Tesla Motors Inc (NASDAQ:TSLA) has been a favourite star of press since the company is established. The company started as a nascent auto manufacturer in the world of established auto juggernauts, and in so little time has achieved so much, making even experienced players envious.

However, there have always been doubts and speculation regarding the future of Tesla. The speculations are high that General Motors Company (NYSE:GM) is eyeing the sparkling manufacturer for long, and according to the analyst Yra Harris of Praxis, General Motors is under process to buy Tesla in 2014. The USA Today published the report of Harris in which the analyst noted that the time is apt for General Motors to acquire Tesla.

Why GM may acquire Tesla

There is a question lingering in the mind of investors, as well as analysts that why would General Motors buy Tesla Motors Inc (NASDAQ:TSLA). According to Harris, GM manufactured its own electronic vehicle; the Volt, which proved to be a failure amongst the customers selling just 19,000 units this year, a decline of three percent from the last year. On the other hand, Tesla Model S is receiving worldwide acclaims for its performance and top looks. The acquisition could give General Motors the much needed leap in the electronic vehicle industry.

Buying Tesla would be an important decision for General Motors, who are looking to tap the electronic vehicle market. Apart from that General Motors is known for its acquisition strategy, which has till now worked in favour of the company.  It is running its acquisition strategy since 1990 purchasing brands like Saturn, bought Hummer, Daewoo, Saab and minority stakes in Isuzu, Subaru, Suzuki, and PSA Peugeot-Citroen.

Not possible in near future

However, General Motors Company (NYSE:GM) has recovered recently from nearly bankrupt situation under the newly appointed CEO Mary Barra, which the company would obviously not sacrifice due the pricey acquisitions. Also, Tesla is losing cash and has just become profitable The Company has not yet come in the profitable category, but it has market capitalizations more than 100 times its actual earnings. No one can doubt the success path the company is riding, but finances are still tight. Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk looks every bit interested in the company, as of now, so the question of selling the brain child of Musk looks completely irrelevant, as of now.