Should Apple Pursue Tesla?

It’s been an interesting time for the technology behemoth, Apple Inc. Recently the company, which is the largest U.S. company based on its market value, joined the Dow Jones industrial average when it replaced AT&T. And earlier this year, Tim Cook announced the arrival of Apple Watch, the much anticipated addition to Apple’s already impressive line of products.

Now, Apple’s shareholders have refocused their energies on purchasing Tesla, the electric car company founded by billionaire Elon Musk. When one shareholder “flat out told Cook” to buy the company, Cook responded with, “I’d love Tesla to pick up CarPlay.” CarPlay is a technological platform available in select cars, which enables individuals to use their iPhones while driving. After pausing, Cook added, “Was that a good way to avoid the question? Hey there are some perks to being CEO.”

But what are the advantages of such a purchase? If Apple were to purchase Tesla, Apple’s “worth [would gain] a competitive edge,” and would be able to take advantage of “a brain trust” of some of the best designers, engineers and general user experience experts in the U.S. and perhaps the world.

Interestingly, journalist Alexander C. Kaufman writing for the Huffington Post started an article by declaring the exact opposite: “Apple probably won’t buy Tesla, no matter how badly shareholders want to see the pair unit.” Quoting analysts at the Huffington Post, Kaufman provides three main reasons why the deal is unlikely to happen.
To begin with, Apple develops products “in-house,” and usually acquires smaller technology companies in order to “absorb their technology” and turn it into something else. Though an Apple car is possible, it’s unclear if Apple wants to join the automotive business.

Additionally, Apple’s products are conceptualized in California, but assembled at third-party factories in China, for example. Tesla builds its own instruments and CEO Elon Musk “has kept a tight grip on [the company’s supply chain,” a system that defers markedly from how Apple operates.

Finally, and perhaps most importantly, Elon Musk is unlikely to sell the company, according to the Huffington Post. However, PC Magazine reports that last year, Elon Musk mentioned that his company ” ‘had conversations with Apple,’ but said he could not comment on ‘whether those revolved around any kind of acquisition.’

In the end, the reasons mentioned above for why Apple will not purchase Tesla are based on one organization’s assessment and Tesla could very well bear the Apple logo sometime this year. But at least for now, Apple’s shareholders will have to content themselves with the company’s continued success, which is not a terrible position to be in.

Just yesterday, Tesla released it’s self-driving update. Yes, that’s right, as of October 15th, 2015, there are automated cars on the road. Will Apple try to buy Tesla so Elon Musk will stop using Google Maps and begin using Apple? Can Apple afford to buy Tesla? After the recent release of the Model X, Tesla seems to just be getting more and more valuable. Apple and Tesla… possibly the two biggest names in technology.