Here we go again. Another writer has taken up the suggestion that Apple should buy Tesla Motors. Judging from the comments on the article though, seems like many people who read that article are thinking the same things I’m thinking. Apple would never buy Tesla, at least let’s hope not.
Apple meets with Tesla
The Apple Inc. (NASDAQ:AAPL) buying Tesla Motors Inc (NASDAQ:TSLA) rumors surfaced last fall when it was reported that an analyst wrote to Apple suggesting that the company buy Tesla. Then in February, it came out that Tesla CEO Elon Musk met with Apple’s mergers and acquisitions head in spring 2013. Of course people naturally drew conclusions from that report, but Seeking Alpha contributor Bilal Liaqat is right in saying that just because the two companies talked, it doesn’t mean it had anything to do with Apple acquiring Tesla.
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He suggests that perhaps the two companies talked about something other than an acquisition. After the report about the secret meeting between the two companies came out, I suggested that they may have talked about including iOS in the Car in Tesla’s cars. This sentiment is echoed again by Liaqat.
Indeed, in March, Tesla Motors was asked about Apple’s new CarPlay system, the final name of what had previously been referred to as iOS in the Car. However, a Tesla spokesperson said they had no comment about it at the time Apple listed off the major automaker partnerships it had for the system. In other words, they either have plans to incorporate it in the future and aren’t ready to talk about it or they met to talk about it last year and didn’t come to an agreement.
Would Musk let Apple buy Tesla?
Liaqat thinks if Apple offered to buy Tesla Motors, CEO Elon Musk would say yes—if it meant that getting the Gen III car up and running would go more quickly. He thinks that because Musk is so hyper-focused on making a mass market electric car, he would say yes if Apple made an offer. But while Apple has enough cash to buy Tesla, it seems unlikely to me that Apple would be interested in making a car for the masses. This goes against everything Apple stands for. The company’s brand is considered exclusive and targets only the wealthy.
Tesla and Apple patents
And then there’s the big issue of patents. Musk decided to share all of Tesla Motors’ patents with the world. Anyone can use them to make electric cars. That in itself should be enough to send Apple running. It seems like Apple might be pretty unhappy if it couldn’t use Tesla’s patents to sue everyone who ever makes another electric car that looks anything remotely like Tesla’s cars.
Musk has also said he would remain with Tesla Motors through production of the mass market electric car. It seems unlikely that he would be willing to go along to Apple as part of an acqui-hire. He tends to prefer doing his own thing, which he wouldn’t be able to do at Apple.
Apple and Tesla’s gigafactory… again
The writer also refers back again to the notion that Apple might partner with Tesla Motors in its massive gigafactory. Indeed, early on I even thought that it could be possible, but the more we hear about the factory, the less likely this seems. Tesla probably won’t make any batteries that are small enough to use in Apple devices because it needs most, if not all of the gigafactory’s capacity for its own batteries. And besides, Apple doesn’t use the same battery form factor that Tesla does, so it wouldn’t even work if they wanted it to. One or both would have to make major investments to accommodate any kind of battery partnership, which, at least with what we know now, seems completely illogical and a waste of money.