Rumors have been swirling about Apple buying Tesla for some months now, but the iPhone maker had not commented or even dropped a hint on the subject until an annual shareholder meeting on Tuesday. However, based on Apple CEO Tim Cook’s reaction to questions from the audience about Tesla, it looks like Apple buying Tesla anytime soon is not in the cards.
Apple CEO Cook working hard to avoid answering Tesla questions from audience
Financial Times reporter Tim Bradshaw reported on his Twitter account that at the Apple shareholder meeting Tuesday, one shareholder told CEO Tim Cook, “I’d like to see you guys buy Tesla,” but Cook’s response was: “We don’t really have a relationship with Tesla. I’d love Tesla to pick up CarPlay. Was that a good way to avoid the question?”
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Another shareholder then commented to Cook: “I think there is something about you two companies [meaning Tesla].” Cook’s slightly cool response was: “Let me think if there’s another way to do a non-answer.”
A little later in the meeting, yet another Tesla lover spoke up. He started talking about how long he’s been a fan of Apple since putting a deposit down on its first computer all the way back in 1984, then brought up Tesla. “There’s something else I’m in love with that’s not Apple — that every time I see it just blows my mind — and that’s when I open my garage and see my Model S,” said the investor. “Am I insane to imagine something might happen here?”
That provoked a round of laughter from the audience. Cook just smiled an said “We’re very focused on CarPlay.”
Apple buying Tesla would hardly dent its $180 billion cash hoard
Even given Tesla’s current lofty valuation of $190 a share, buying the electric vehicle maker would not be a financial stretch for Apple by any means. The iPhone maker has almost $180 billion in the bank (and sales remain strong), and the current market cap of Tesla is only around $25 billion.
Secret Apple Car plans make Tesla a logical target
Although there has been no official comment from the company to date, it’s pretty obvious Apple has been assembling a team focused on electric vehicles. The iPhone maker has hired automotive-battery experts with a goal of production as soon as 2020, according to knowledgeable Bloomberg sources. If Apple does decide to enter the EV business, the firm would be competing against vehicles from a slew of automakers, including Tesla and GM, who are planning to release electric vehicles that can go more than 200 miles on a single charge and cost under $40,000 by 2017.
This is not the first time an Apple-Tesla partnership has been rumored. Tesla skyrocketed north if $200 a share back in early 2014 on speculation about the nature of a meeting between Tesla CEO Musk and Apple’s M&A chief.
There has also been a good of talk about Apple trying to “poach” Tesla engineers, but Tesla actually has more ex-Apple employees than from any other firm.
Musk told Bloomberg Businessweek in a recent interview that he is aware recruiting efforts work both ways. “Apple tries very hard to recruit from Tesla. But so far they’ve actually recruited very few people.”