The German car giant was claimed to be one potential investor in the Silicon Valley company, alongside private equity firm Silver Lake and a Saudi sovereign wealth fund. Tesla CEO Elon Musk confirmed on Friday that Tesla will remain a publicly traded company after the deal fell through.
It is not clear exactly why Musk changed his mind about taking Tesla private, but the WSJ report suggested that he balked at the proposal of relinquishing further control of his company in order to secure the investment.
The necessary investment to take Tesla private was estimated at around $30 billion, of which VW was looking to make a substantial commitment. The company wouldn’t be the first car maker to hold a stake in Tesla, with both Toyota and Daimler investing in the EV start-up’s early years.
Meanwhile, Musk could face an investigation by the Securities and Exchange Commission after tweeting about taking Tesla private at $420 per share, claiming funding to do so was “secure”. No board statement or regulatory filings had been made to confirm this.
The attempted move by VW to invest in a major EV player such as Tesla could be seen as a quick way to gain market share in the EV market — a particular desire for both VW's US operations and overall long-term strategy.
The firm is expected to launch “practically one new electric model per month” by 2022, according to CEO Herbert Diess. The VW ID hatchback is due to be the company’s first purpose-built EV, launching in 2020.