Analyst Argues Apple Should Not Buy Telsa - Is He Wrong Or Right?

Business Insider published an article yesterday that Apple  should buy Tesla. It must have been a slow day and this thought seems to crop up about every six months or so. (Note that I own Apple shares).

As Elon Musk said in Tesla’s latest earnings conference call manufacturing cars is very hard. Yes Apple is very good about having OTHERS build millions of iPhones, iPads, iPods and Macs. I don’t know of a car manufacturer who outsources the actual building of its products. In this line of reasoning Apple should buy Tesla so it can ‘streamline and fix Tesla’s manufacturing process’. Also keep in mind that Apple builds and sells tens of millions of units not thousands. There is a big difference in the processes.
 

Vette71 - 11/13/2014 2:35:16 PM

+2 Boost

NO. Completely different businesses. There is no synergy or leverage that Apple could bring to Tesla. Different customers, channels of distribution, rate of technology change, regulatory agencies, etc. etc. The previous post re "Cooking the Books" at Tesla says that there may be trouble ahead. Even at half the price Apple shouldn't go near it!

vdiv - 11/13/2014 4:33:05 PM

+1 Boost

If you think of the Model S as a giant mobile phone/tablet then they may not be all that different after all. If you look at the supply chain it may not be that different either. If you look at the audience (premium computing products, premium cars, emphasis on design), not that different.

I do agree, they should not merge.

Vette71 - 11/13/2014 8:52:22 PM

+2 Boost

I've worked in both businesses. They are totally different. A vary tiny tiny portion of the Apple customers would want a Tesla, and most couldn't afford one. Outside of a few computer chips there are few common parts or suppliers. The development process is different. When was the last time Apple crash tested an iPad to meet USA or European standards?

ParadoX - 11/13/2014 6:34:39 PM

+3 Boost

They are two entirely different industries. It doesn't really make sense for either company. I don't see why Apple would want a car company (all the talk of an iCar is nothing but click bait), or why Tesla would want to be owned by a company more concerned with other industries.

The best path for both companies would be an arrangement whereby certain Apple technologies are use in infotainment systems (if the price is right).

MDarringer - 11/13/2014 9:10:01 PM

+2 Boost

Tesla hasn't been around long enough to have a track record. Prior to the Model S their "production" was bolting batteries into a Lotus and pretending to be a manufacturer.

Moreover, they don't offer any amazing advantage in technology that will pay off long term.

Tesla is 1000% a swindle scheme by Elon Musk to get a big company to THINK that Tesla is the holy grail and buy it at a wildly inflated price.

The fact that Toyota terminated their arrangement with Tesla should be a HUGE red flag.