Apple Inc. (NASDAQ:AAPL) held a secret meeting with Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk last year, Musk has confirmed. Though there were speculations that Apple might have considered acquiring the electric vehicle maker, the two companies haven’t come together yet. Now that Tesla has announced its plans for gigafactory, Gartner analyst Thilo Koslowski says that Apple can get involved in the massive battery production plant to build mutually-beneficial strategic business relationships.
Tesla can produce batteries for Apple products
Tesla Motors Inc (NASDAQ:TSLA) announced earlier this week that it plans to build a 10-million square foot battery production plant that will become operational by 2017. The entire project would cost about $4-$5 billion. The San Francisco-based company is raising $1.6 billion in convertible notes to fund the erection of its factory. The sheer scale of its operation and Tesla’s technical expertise will bring down the cost of Li-ion batteries. That will help Tesla bring its vehicles to the mainstream market.
The same Li-ion batteries that power Tesla Motors Inc (NASDAQ:TSLA)’s cars are also used in smartphones, tablets and many other electronic devices. If the Elon Musk-led company really produces batteries at the same scale it has promised, electric cars will be just one of the machines where its batteries can be used. That’s why Thilo Koslowski, auto industry analyst at Gartner, says that now it makes more sense for Apple Inc. (NASDAQ:AAPL) to join hands will Tesla. Koslowski told Wired that Tesla could eventually begin selling its batteries for products beyond cars. That means the automaker might actually produce batteries for Apple.
What Apple stands to gain from the project?
Apple Inc. (NASDAQ:AAPL) can easily supply the entire money needed for the gigafactory from its deep pockets. The economy of scale promised by Tesla Motors Inc (NASDAQ:TSLA) will give it a whole new level of sophistication, efficiency and control. The battery making industry is highly automated. And Tesla’s car-making robots are proof that the company does automation really well. If Apple gets involved in the project right from the beginning, it could enjoy the intimate involvement it historically enjoys with its key suppliers.
Apple Inc. (NASDAQ:AAPL) shares inched up 0.50% to $530.30 at 9:37 AM EST.