• by Laurie Sullivan  @lauriesullivan, February 10, 2020

A group led by MIT engineers and Wall Street analysts is speculating about the sale of Tesla to Google and what it would mean for the technology and the two companies. 

Trefis, a data analytics and research company known for answering what-if questions, breaks down the numbers into three parts. For starters, it looks at what Tesla and Google would each gain. Then it lays out a scenario in which Tesla’s value could rise to $1.5 trillion, boosted by a deal with Google. 

The analysis takes into account Google’s $1 trillion market cap for a combined entity worth more than $2.5 trillion.

Despite the case Trefis tries to make based on Google’s software muscle and large pile of cash, as well as a combined multi-trillion-dollar stock valuation or at least $1.5 trillion, Global Equities Research Managing Director Trip Chowdhry says it is a ridiculous scenario for Google to acquire a company like Tesla, which he calls a “technology conglomerate.”

Tesla has created technology using neural network processing units and materials such as an exoskeleton to keep drivers safe in the result of a crash, explains Chowdhry, who has covered Tesla as an analyst for years.

“Telsa will become the very first company all on its own to be valuated at $2 trillion,” he said, so “Google buying Tesla doesn’t make sense.”

This decade is all about technology conglomerates -- meaning companies that have technology in multiple industries and the ability to fuse them to create completely new products that the world has not yet imagined.

Chowdhry said Google is a search company, although its parent Alphabet has other companies to support it. Waymo, Google’s self-driving car project, “is on life support,” he said. Waymo is based on LiDAR technology, which Chowdhry says is colorblind, so it cannot tell if the traffic light is yellow, red, or green.

“Google is running Waymo as a lab experiment and that’s not going to add any value to Tesla,” he said. “Tesla is the new Apple.”