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Tesla CEO Elon Musk says if rival asked for a merger he'd 'have that conversation' but wouldn't do a hostile takeover

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Key Points
  • "I think we're definitely not going to launch a hostile takeover," Musk told Axel Springer CEO Mathias Doepfner during a live event streamed to YouTube.
  • Musk said he'd have the conversation with a traditional carmaker if it was pitched.
  • Tesla needs its capital for other things, like battery development and manufacturing.
Elon Musk, CEO of Tesla
Beck Diefenbach | Reuters

Tesla CEO Elon Musk addressed a theoretical question about whether or not he would be game for a merger with one of the incumbent car companies.

"I think we're definitely not going to launch a hostile takeover," Musk told Axel Springer CEO Mathias Doepfner on Tuesday during a live event streamed to YouTube.

Doepfner pressed Musk if he'd consider a friendly takeover. "If somebody said, 'hey, we think it would be a good idea to merge with Tesla,' we'd certainly have that conversation. But we don't want it to be a hostile takeover situation," Musk replied.

The scenario was purely theoretical.

Tesla currently needs its capital for other things, like its battery plans, mining and manufacturing advances that it has said will lead to, among other things, lower vehicle prices.

In a letter to employees on Tuesday, for example, Musk highlighted the importance of controlling costs.

"In order to make our cars affordable, we have to get smarter about how we spend money," Musk said. "This is a tough Game of Pennies, requiring thousands of good ideas to improve part cost, a factory process, or simplify the design while increasing quality and capabilities. A great idea would be one that saves $5, but the vast majority are $0.50 here or $0.20 there. In order to make the electric revolution happen, we must make electric cars, stationary batteries and solar affordable to all."

Musk, known for being overly optimistic, said in September, for example, that Tesla is confident it can make a $25,000 fully autonomous vehicle in three years. "It's not like Tesla's profitability is crazy high," he said at the time. "It's not like we're minting money. Our valuation makes it seem like we are, but we're not."

The full interview with Musk is below.

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-- CNBC's Lora Kolodny contributed to this report.