With Peugeot (PUGOY) and Fiat Chrysler (FCAU) - Get Report announcing that they are tying the knot in a $50 billion deal that will create the world’s fourth biggest carmaker, one has to wonder: Is Tesla’s (TSLA) - Get Report Elon Musk getting worried yet?
The answer, for the short term, is a definitive no.
While the mega, trans-Atlantic merger positions both Peugeot and Fiat Chrysler to take on the inevitable shift to electric vehicles and other new people-moving technologies, there is no immediate plan the Italian-French car-making duo to immediately plug in to Tesla’s turf, according to preliminary statements from the companies' boards.
The longer-term picture, however, is absolutely.
With the likes of Ford F, General Motors (GM) - Get Report, BMW (BMW.DE) , Daimler AG (DAI:GR) , and others all working on shifting their combustible engine-focus to electric, it is only a matter of time before Peugeot/Fiat Chrysler or any of the other large automakers comes up with a Tesla-beating offering.
The Peugeot-Fiat Chrysler deal, when completed, will create an auto-making giant selling 8.7 million vehicles a year with revenue of nearly €170 billion ($189 billion).
It also marks an around-the-world trip for what was once America's dead-last automaker, saved only by the ingenuity and foresight of Detroit legend of Lee Iacocca, who had the foresight to introduce smaller, lighter engines and vehicles that guzzled less gas - and an iconic convertible that both rebranded and reinvigorated the ailing company.
One can’t leave it to chance that Iaccoca’s legacy still doesn’t linger within Fiat Chrysler, and that another mass Tesla-challenging hit won’t emerge from the newly combined company.
For Musk's part, he has publicly stated that he welcomes innovation in the staid auto industry, and would love to see the competition bring it on.
Besides, none of them will have Tesla's soon-to-be-built Cybertruck.