Should Apple Buy Tesla?

The rumors on whatever Apple’s car development project is about have simmered down a bit, but that it is doing something is certain, and that shareholders have asked Apple’s CEO Tim Cook to buy Tesla is now certain as well.

At Apple’s shareholder meeting, Financial Times reporter Tim Bradshaw observed that Cook evaded pointed questions by two successive shareholders suggesting Apple buy Tesla Motors.

SEE ALSO: Should We Expect An Apple Car or Not?

“I’d like to see you guys buy Tesla,” said one shareholder, to which Cook said he would like to sidestep a pointed answer.

“We don’t really have a relationship with Tesla. I’d love Tesla to pick up CarPlay,” said Cook in response speaking of Apple’s in-car infotainment interface. “Was that a good way to avoid the question?”

Next on deck was another shareholder who again chimed in on the subject to be avoided.

“I think there is something about you two companies,” said the shareholder to Cook.

“Let me think if there’s another way to do a non-answer,” said Cook.

As Business Insider observed, it’s unclear whether these two shareholders hold much weight in offering their opinions, but it’s “interesting” they are voicing this opinion.

Nor is it a view born in a vacuum.

iCar

The iPhone maker is at work poaching auto industry engineers and others with relevant experience to very possibly build an electric car. It may be autonomous too although some in the car industry have said they do not believe Apple wants to go into the car manufacturing business and has something else in mind.

From the sidelines at the auto show in Geneva last week, Renault-Nissan CEO Carlos Ghosn did allow for the possibility that Apple may be building an EV for production however.

Similarities

As the shareholders observed, Tesla and Apple do have aspects in common. Tesla did hire former Apple executive George Blankenship a few years back to lead its store planting and marketing of its products following lessons learned at Apple.

Blankenship has since left the company, but Tesla has admired Apple and the two companies have gotten together for private talks. Whether possible acquisition was ever on the table, or less pressing matters were chatted about is not certain, and neither company has cleared this up for speculators.

Differences in Vision?

But for all the similarities, it’s been observed Cook says Apple wants to build the “best” products but not necessarily the most – i.e., maximize market share.

On the other hand Tesla’s anticipated Gigafactory and Model 3 are intended to launch Tesla to 15-times the sales volume it did in 2014, and here Musk wants to lower prices and bring products within reach of many more car buyers.

Cash Not The Issue

Apple has cash on hand equal to seven-times Tesla’s present $24.3 billion market cap, or around $178 billion.

Its market cap is $754 billion or nearly double the top five automakers’ combined total.

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That it could broach the subject with Tesla is not in doubt. Nor is there question that it is exploring products similar to what Tesla is doing.

The shareholders see it. But would it be a good idea really? Or should Tesla remain Tesla, and Apple remain Apple, and the car industry will still be shaken to its core in the next decade regardless?

Business Insider