What if apple buys tesla

Apple reportedly offered to buy Tesla for more than it is worth today in 2013, but a demand for boss Elon Musk to be left out of the acquisition thwarted the deal.

The claim came from Roth Capital Partners analyst Craig Irwin, who told CNBC: «Around 2013, there was a serious bid from Apple at around $240 a share.»

This is comfortably above what Tesla is worth today (around $194 per share), and also above its value in 2013, which varied wildly from a low of $37.50 to a year high of $193.

Irwin added: «This is something we did multiple checks on. I have complete confidence that this is accurate. Apple bid for Tesla. I don’t know if it got to a formal paperwork stage, but I know from multiple different sources that this was very credible. my understanding is Apple wanted Elon Musk to step away, and that was a deal killer.»

This isn’t the first time news of Apple considering buying Tesla has emerged. In 2014, Adrian Perica, then Apple’s mergers and acquisitions chief, reportedly met with Tesla boss Musk in Apple’s hometown of Cupertino the previous spring — fitting neatly into Irwin’s own timeline.

Here’s why Apple may have wanted Tesla: Apple is very good at what Tesla is bad at, namely, mass-producing goods in a timely fashion with consistent build quality. On the other hand, Tesla likely holds answers to Apple’s long-held desire to build a car, thanks to its industry-leading battery technology, vehicle performance, and global Supercharger network.

But Warren Buffet doesn’t see it this way. Speaking to Fox Business News in 2018, he said Apple investing in, or buying, Tesla would be a «very poor idea,» adding: «It’s not an easy business. You can win in auto one year and lose the next. You’ve got a dozen big companies out there with resources. They’re going to keep coming. They’re going to copy what you do.»

And yet, it still makes for a profound question. What if Apple decided it would part with the $30-$40 billion required to buy Tesla?

The two companies have a fair few similarities. Customers who cheer at Elon Musk every time he walks on stage mirror the admiration projected at Steve Jobs during each of his famous product launches. Those same fans then line up, often overnight, outside Tesla stores to get their names in the order book for a new car — as iPhone fans have done for the past decade.

For all of their faults — and there are plenty, from build quality failings to Autopilot concerns — the way Tesla cars operate, mirror Apple’s old motto of «It just works.» Walking up to a Model 3 and having it unlock because it senses the Tesla app installed on the smartphone in your pocket is a seamless experience. So too is the Supercharger network. It may cost money to use now, but it ‘just works’ in a way public charging stations rarely do.

Tesla’s fondness for minimalist design fits neatly with Apple’s own aesthetic sparseness, with the wooden trim of the Model 3’s dashboard reminding us of the tables in Apple’s retail stores. The two companies also pitch at the premium end of the market ($35,000 Model 3 notwithstanding), and each company appears to be on a mission far greater than selling consumer products — what with Tesla’s goal of reversing climate change, and Apple’s drive into healthcare via its ECG-equipped smartwatch.

Both Musk and Apple design chief Jony Ive are fans of British sports cars; Ive’s prefers Aston Martins, while Musk blew some of his PayPal windfall on a $1M McLaren F1 (before totaling it).

That last point however, Musk’s apparent recklessness, is where Apple and Tesla set off on different paths.

In a world where consumer faith in technology companies to do the right thing ebbs away via Facebook scandals and data misuse, Apple says no to the FBI’s backdoor request and makes claims about consumer security and privacy which feel more genuine than those made elsewhere in Silicon Valley. Apple’s sensibilities can arguably stretch too far, however, given reports that its upcoming TV service will take a squeamish stance on violence and adult content — both cornerstones of some of Netflix’s biggest shows.

Contrast this to Musk, the chief executive of a public company who, on Twitter, is often found sailing close to the wind, where the impact of his tweets range from giving the Tesla PR department a headache, to earning a fine from the SEC, which ordered him to step down as company chairman.

No wonder Apple’s alleged bid for Tesla in 2013 demanded Musk not be part of the deal.

It’s a shame Musk has this self-destructive streak to his personality, because when it is reined in a little and focused on his products, Tesla cars shift into a gear the rest of the market cannot reach. They have a personality and a sense of humor thanks to numerous ‘Easter eggs’ hidden throughout the software. For example, you can’t change the navigation map to Mars in a BMW.

This of course raises the question, would Tesla be as popular today if it had been swallowed up by Apple back in 2013? The Model S was just a year old, while Models X, 3 and Y sat patiently on the drawing board, along with solar roof tiles, house batteries, trucks and Autopilot.

It is extremely unlikely that Apple would have pushed ahead with Autopilot as quickly as Tesla did — a speed which scared off one-time computer vision partner Mobileye, in the wake of the 2016 death of a Tesla driver using Autopilot.

It is also somewhat unlikely that Apple would have stuck to Musk’s roadmap of using the profit earned from a luxury electric car to produce an affordable EV for the masses (the Model 3). Making affordable products for everyone is not something Apple does; instead, it somehow convinces the masses to part with $1,000 for a new smartphone each and every year, albeit in falling numbers of late.

Apple might have physically downsized Tesla’s vehicles, resulting in something similar to the Model 3, but the company is unlikely to have compromised on quality and luxury to achieve a barely-possible $35,000 price tag. Accustomed to a near-40 percent profit margin, Apple would surely have balked at the circa-8 percent generally earned by car makers, even without chasing the mass market.

What about using Tesla technology to create a transport solution? This is what Apple is believed to now be working on, as its secretive Project Titan shifted gears when the company better understand the difficulties of producing a new car from scratch — pains Musk is all too familiar with after enduring Tesla’s «production hell.»

Apple could have taken Tesla’s electric powertrain tech, along with its early work on Autopilot, and combined this with its own efforts to create an autonomous ride-sharing vehicle. We may even have seen such a thing at the new Apple Park campus, silently and autonomously shuttling workers from the parking lot, or even to their homes.

But is this the Apple way? A public transit solution lacks the glamour Apple bakes into its other products, and any work on autonomy will surely raise a great many cautious eyebrows in Cupertino. Tesla seems to have somehow shrugged off three deaths where Autopilot was active, but we can’t see Apple ever risking that situation in the first place, let alone getting away with it almost unscathed. A few iOS blunders aside, Apple’s image is too highly polished to let itself get caught up in the twisted metal of a very public car crash.

What if Apple took Tesla’s roadmap from 2013 and jumped ahead a decade? This would see it ditch Musk’s wholesome EVs-for-everyone dream, and instead offer the outrageously fast, expensive and luxurious Roadster. This car, due in 2020 and expected to leave gas-powered supercars wondering where it went, is where we could see Apple, a company obsessed with speedy gadgets, ending up, had it bought Tesla.

Indeed, Apple visited British supercar maker McLaren in 2016 to talk about what each company did, but contrary to rumors of an acquisition, these talks «never matured to a definitive proposition,» McLaren CEO Mike Flewitt told Reuters. Apple is also said to have spoken to BMW about a joint venture with its i3 electric city car, but nothing came of that either.

Apple’s automotive ambitions have since reversed back into the shadows, with Project Titan now focused more on software (mapping and potentially automation) instead of actual vehicles with glowing Apple logos on their hoods. Although it certainly has the cash, perhaps Apple felt delivering an Ive-designed electric car, sold alongside Macs and iPads, was a step too far.

Fast-forward to the present day. Tesla’s share price is at its lowest point since January 2017, and Musk’s latest all-staff email (promptly leaked to the press, as always) claims the company only has enough cash to survive for 10 more months. A buyer could soon be needed but, despite the excitement it would certainly ignite, Apple is not the hero Tesla needs. As much as Musk would resent it, Tesla needs a legacy carmaker like BMW, Daimler or the VW Group to open its checkbook and give it the scale — and stability — it desperately needs.

But, just as Apple insisted back in 2013, we cannot see any takeover bid allowing Musk to remain in the driving seat.

Alistair Charlton

MORE FROM Alistair Charlton

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🛑 Why Apple didn’t buy Tesla

January 4, 2021 TOGETHER WITH

A recreation of Tim Cook’s conversation with Elon Musk (accuracy may vary)

The reason Apple wouldn’t acquire Tesla

It’s a deal that would have broken the internet: Apple acquiring Tesla.

According to Elon Musk, the Tesla CEO reached out to Apple’s CEO Tim Cook in 2017-18 to discuss a possible deal, but — as they say in official M&A language — Cook ghosted.

This revelation came a day after Reuters recently reported that Apple was aiming to have car production online by 2024.

Tesla was worth

$60B when Musk reached out…

…1/10th of its current market value. Apple did have the cash on hand at the time (

$120B) to make a deal at those eye-watering numbers.

However, such an acquisition simply doesn’t fit into Apple’s M&A playbook. According to Apple analyst Neil Cybart, there are 3 business components that Apple doesn’t look for in an acquisition:

• Brand: Apple already has the world’s leading brand.
• Revenue: It grows revenue through internal efforts, not acquisition.
• User base: Apple already has 1B+ users that will happily buy anything it sells.

Neither Tesla’s sterling brand nor its loyal fan base would have been much use to Apple.

What does Apple use M&A for?

According to Cybart, Apple typically acquires a company for technology or talent.

Consider Apple’s biggest acquisition: Beats Electronics for $3.2B in 2014. While the Beats brand was well-known, the lasting legacy from the acquisition is the underlying tech and know-how that has powered Apple Music and the expanding AirPods line.

Instead of spending tens of billions to acquire Tesla, Apple has gone the much cheaper route of selectively poaching talent.

The biggest name poached: Doug Field

He is a former Apple employee who left for Tesla in 2013. After 5 years working with Musk, Field was one of 46 employees who left Tesla for Apple in 2018.

He heads Apple’s car project (“Project Titan”) and — per Reuters — must now decide if Apple will manufacture its own car or license its auto software to a third party.

While Apple didn’t get to break the internet with a Tesla acquisition, we all know it’s gonna get cray when the iCar hits in the next few years.

The Big Idea

Get The Shell Out Of Here

Anonymous shell companies will (finally) be illegal In the ranking of “Why is this thing allowed to exist?”, anonymous shell companies are pretty high up there. Per The Economist, the situation is so bad that America ranks 2nd-worst on another list, The Tax Justice Network’s financial-secrecy index. It barely beats out the Cayman Islands, a place synonymous with shady financial dealings. Here’s an embarrassing fact: In all 50 states, there are more disclosure requirements to get a library card than to start a new LLC. Things are set to change As part of the new defense bill, anti-money-laundering rules will have stricter disclosure requirements, including naming true owners, not just people who signed the papers. “Required ownership disclosures will help prevent terror groups, drug cartels or other bad actors,” writes the Wall Street Journal. The US Treasury Department will outline the exact measures over the next year. Not everyone is happy with the new rules The National Federation of Independent Business says additional requirements — and threats of fines — will be a burden for small businesses. However, the estimated filing time is only 30 minutes. The new bill will also create new avenues for whistleblowers to report on financial crimes, per the WSJ. Together, these moves should improve America’s dubious standing on that good ‘ol financial-secrecy index. We’re entering crisis mode: Our copywriter keeps losing weight and gaining confidence As of this week, he’s down 13 lbs and up one heaping dose of swagger. And frankly… it’s a problem: He signed off our all-hands Zoom meeting on Monday by doing the double-finger-guns and winking at Sam He said he’s getting into the “riverboat gambling business” but won’t elaborate (he thinks it’ll “spoil the surprise”) He just started rocking an earring But hey, that’s just what happens when you feel good about yourself. Noom year, Noom me Noom’s approach to changing your eating habits works by focusing on 3 common (and underutilized) areas. Knowledge: Learn what to eat, why you make the choices you do, and how to build new habits that last — all on your own terms and pace. Flexibility: Noom accommodates your favorite foods, existing schedule, and lifestyle, so making a change doesn’t feel overwhelming. Support: Your one-on-one coach plus the Noom community support — not pressure — you on your way to success. That means unlike traditional New Year’s Resolutions, you can stick with it for the long haul. Want to try Noom for yourself? Get a 7 day trial of for $0.50:

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Amazon’s podcast play, explained

Last summer, Spotify had a very noteworthy job posting on its website: “Head of Audio Books.”

It was a logical step for the streaming giant, which has aggressively expanded from music to podcasts.

Amazon — which owns the current audiobook leader, Audible — must have taken notice, and its $300m deal for podcast studio Wondery (“Dr. Death,” “Dirty John”) is likely in response to the rising Spotify threat.

Amazon is building a moat for Audible and Amazon Music

According to leading podcast analyst Nick Quah, Amazon made 2 notable additions in the fall designed to keep users on its platform:

• Podcast distribution: It now hosts third-party podcasts so that users don’t have to jump to another app for podcast playing.
• Original content: A slate of exclusive “podcasts” were created, allowing Amazon to differentiate its audio offerings.

While Wondery content will initially appear on Amazon Music, the deal can clearly help Audible down the line, too.

Podcast listeners are projected to hit 2B by 2025…

… up from 800m in 2019, per data firm Omdia.

Amazon’s move is the latest in a space that has seen a frenzy of activity:

• Spotify scooped up talent like Joe Rogan, The Ringer, and Gimlet Media as well as tech for production (Anchor) and ads (Megaphone)
• TheNew York Times acquired Serial Production, an audio production company
• Sirius XM (which owns Pandora) acquired podcast player Stitcher and hosting service Simplecast
• Apple acquired Scout FM, which uses AI to curate custom podcast playlists

The land grab is so crazy that The Hustle is mulling a new job posting: Head of WTF is Going On in Podcasts.

In Pod We Trust

What were the top stocks of 2020?

If you were invested in the S&P 500 on January 1, 2020, and fell asleep for the entire year, you would have woken up on December 31, 2020, with a +16.3% gain.

That is nuts (as if nothing happened!).

The index would have gone even higher if its top 2 performing stocks (Tesla, Etsy) were added to the index earlier in the year.

Across the entire S&P 500 index, 6 stocks gained at least 100%:

1. Tesla ($TSLA): +743%
2. Etsy ($ETSY): +302%
3. Nvidia ($NVDA): +122%
4. Paypal ($PYPL): +117%
5. L Brands ($LB): +106%
6. Albemarle ($ALB): +102%

Stonks

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Land Rover ad… pls do not try this at home

The car industry is no stranger to M&A deals, with many huge ones taking place in recent decades:

Daimler-Benz’s takeover of Chrysler for $38B in 1998. At the time, it was the world’s largest cross-border deal ever, but the “marriage made in heaven” saw a huge clash of cultures between the German and American car manufacturers. Following a number of lawsuits, Daimler sold Chrysler off for $6B in 2007.

Chrysler filed for bankruptcy in 2009, which started a process that would see Fiat take over the car company by 2014 (costing $10B+ in total).

Car M&A of the day

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