Apple: Rumors of EV to Challenge Tesla or Buying Tesla

[AlMc]

Discussion about who would support or oppose Apple acquiring TM. http://www.insidermonkey.com/blog/a...would-hedge-funds-approve-of-a-merger-340358/

Summary: The article concludes that Apple stockholders and many of the hedge funds shorting TSLA would oppose the deal.

 

[MikeC]

Discussion about who would support or oppose Apple acquiring TM. http://www.insidermonkey.com/blog/a...would-hedge-funds-approve-of-a-merger-340358/

Summary: The article concludes that Apple stockholders and many of the hedge funds shorting TSLA would oppose the deal.

I read it as many of the hedge funds that are long AAPL are also short TSLA, and so as AAPL shareholders they would vote against it. The author lost credibility with me once he stated, "Another issue is the fact that Tesla’s stock is currently significantly overvalued" and cites Elon's comments when the stock was at $290 as evidence.

 

[vinnie97]

No thanks, not interested in an Apple car. Stay the course, Elon.

 

[Joel]

It appears A123 and Apple are reportedly close to settling: Apple and A123 Systems Nearing Settlement in Battery Engineer Poaching Lawsuit - Mac Rumors

And

Tesla hires former Apple Head Recruiter:
Tesla hires head Apple recruiter after losing own recruiter to Apple Car team | 9to5Mac

 

[TSLAROX]

Some third-hand info about Apple's car, so take with a grain of salt: Not autonomous, designed to compete with BMW 1 series, and it will be marketed to Millennials (who don't care about owning cars--perhaps Apple is trying to change that).

 

[Joel]

Tesla and Apple in the news again:

Are Apple And Tesla Secret Partners? - Yahoo Finance

 

[TSLAROX]

Are Apple And Tesla Secret Partners? - Yahoo Finance

Doubtful. I heard that Apple proposed collaborating on a car with Tesla. Elon said no. So Apple decided to go ahead with their own car. As I posted above: The car will not be autonomous, it is designed to compete with BMW 1 series, and it will be marketed to Millennials (who, for now, are shunning car ownership, preferring instead to use ride-sharing and car-sharing. Maybe Apple thinks they can change that...). All of this is hearsay, so make of it what you will.

 

[ecarfan]

Yahoo will write anything just to get clicks. A lot of online "journalism" is based on that premise. It is driven by the marketing department and there is no editorial filter.

 

[Auzie]

I heard that Apple proposed collaborating on a car with Tesla. Elon said no. So Apple decided to go ahead with their own car.

Any hints on what sort of collaboration did Apple have in mind?

Apple brings cash and their brand to the table. Tesla seems to be very good at both securing cash and building a great brand, hence Apple's proposal, whatever the terms were, seems redundant in the current environment.

If the environment changes, it is comforting to know that there might be more than one white knight interested in bidding for Tesla.

If any business wishes to partner with Tesla, they are more likely to succeed if they offer some skills and capabilities that feed into Tesla's weaknesses rather than strengths.

 

[Quant]

Any hints on what sort of collaboration did Apple have in mind?

Apple brings cash and their brand to the table. Tesla seems to be very good at both securing cash and building a great brand, hence Apple's proposal, whatever the terms were, seems redundant in the current environment.

If the environment changes, it is comforting to know that there might be more than one white knight interested in bidding for Tesla.

If any business wishes to partner with Tesla, they are more likely to succeed if they offer some skills and capabilities that feed into Tesla's weaknesses rather than strengths.

Perhaps! But as far as Apple goes, I think there is more competition than cooperation there! How exactly would Elon and Tim Cook handle personal relationships, reporting relationships if Apple were to buy Tesla!

Given Elon's personality and engineering bent, I think he and Tim would be mismatch. Tim Cook is a great executive and manager, but engineer he is not!

Also, Elon is close to Larry Page and Sergey Brin at Google. They are both the engineering type.

Given the bad blood between Google and Apple from when Eric Schmidt was CEO (and how Google practically stole the iPhone concept and design) there is tremendous bad blood between Apple and Google ( and this is deep within Apple because of Steve Jobs).

So, I suggest that if Apple were to buy Tesla, Elon would probably not agree to stay on for more than 18 months. And it would be slap in the face to his friends Larry Page and Sergey Brin.

A Google acqusition is more likely, but due to the new battery storage business and Gigafactory, and current valuation of about $ 30 Billion, it would be a highly dilutive acqusition for Google for many years, as any acquisition ( due to new battery business ) would probably cost Gooogle north of $ 75 Billion. Even if a combo of cash and stock, this would be highly dilutionary.

So, for many of the above reasons, I think any kind of buyout of Tesla would be rather difficult to pull off because of the new battery business, making Tesla a very very large acqusition with no near term earnings of sufficient magnitude.

One can never say never, but the probability of making this work, is quite low and quite complicated, IMO.

 

[Johan]

You're probably right Quant. However I could see both Apple and Google partnering with Tesla in a future Gigafactory. Especially Google who will need lots of batteries for data centers in the future. Google is already investing a lot of solar, wind, etc. so it would be logical for them to persue and secure a battery supply at low (partner) pricing.

 

[chickensevil]

You're probably right Quant. However I could see both Apple and Google partnering with Tesla in a future Gigafactory. Especially Google who will need lots of batteries for data centers in the future. Google is already investing a lot of solar, wind, etc. so it would be logical for them to persue and secure a battery supply at low (partner) pricing.

Sure you help me by giving me 5B for a gigafactory and in turn I'll pay you out in batteries until you get X number of packs and then the factory is mine and any more cells you have to pay for... Maybe something like that?

 

[Krugerrand]

The most interesting aspect about this whole thing is that the Apple & Tesla rumor just will not die. Sometimes that's for a reason. We'll just have to continue to wait and see if anything concrete materializes.

 

[AlMc]

The most interesting aspect about this whole thing is that the Apple & Tesla rumor just will not die. Sometimes that's for a reason. We'll just have to continue to wait and see if anything concrete materializes.

hmmm.....I can see lots of questions for EM at the shareholder's meeting.....He tends to be is less evasive than TC was at the Apple watch reveal.

 

[Joel]

I apologize for the cross post, but this is relevant to this thread:

CARL ICAHN ISSUES OPEN LETTER TO TIM COOK

At $1.6 trillion, the enormous addressable market for new cars is approximately four times the size of the smartphone market. It’s estimated that people spend an average of 1 hour every day traveling, mostly in cars, but not everyone drives, implying that the average time that daily commuters spend in a car is much higher. We believe the rumors that Apple will introduce an Apple-branded car by 2020, and we believe it is no coincidence that many believe visibility on autonomous driving will gain material traction by then.

As autonomous driving would release drivers’ attention from the activity of driving and navigating, and perhaps even increase the time people actually want to spend inside a car, both an automobile and the services provided therein become even more strategically compelling. While Apple currently addresses this market with CarPlay, it seems logical that Apple would view the car itself as a the ultimate mobile device to which it could bring its peerless track record of marrying superior industrial design with software and services, along with its globally admired brand, and offer consumers an overall automobile experience that not only changes the world but also adds a robust vertical to the Apple ecosystem. And for Apple, the car market is more than big enough to “move the needle” significantly, even as the world’s largest company.

The rising cost of oil, its impact on global warming, the geopolitical risks associated with oil dependency (especially as fuel for automobiles), followed more recently by the rise of cost effective alternatives presents a “change the world” opportunity for Apple. It is widely believed that the electric battery will play a key role in this transition. The lithium-ion battery already represents a critical component across many of Apple’s existing products (iPhone, iPad, Apple Watch, MacBook, Beats) and any further innovation could be a “game changer” in terms of both battery life and form factor across Apple’s entire ecosystem. Since lithium-ion batteries represent a large percentage of the cost of today’s electric vehicle, we believe Apple should be well positioned to leverage its existing knowledge domain and more robust R&D spending in this area, and in turn apply any energy density / battery life improvements for a car across all the other products in its ecosystem that will share the benefit from such battery innovation (iPhone, iPad, Apple Watch, MacBook, Beats).

As a mobile device that is differentiated by design, brand, and consumer experience where software and services are increasingly critical, an Apple car would seem to be uniquely positioned.

 

[Joel]

The Chatter continues...

Apple Executive Adds to Chatter That Company Is Looking to Cars - Yahoo Finance

Confronted by a shareholder Wednesday at a rare public forum over where Apple is looking to invest its cash, Jeff Williams, Apple’s senior vice president of operations, seemed to suggest the automotive industry.

“The car is the ultimate mobile device, isn’t it?” Williams said during the Re/code conference in Rancho Palos Verdes, California. Pressed further by Re/code co-founder Walt Mossberg, Williams appeared to pull back a little, addressing the importance of Apple’s in-car information and entertainment system, CarPlay.

 

[Auzie]

If I were short Tesla, I would be either terrified or delusional. Delusional is more likely.

I see these rumours about both Google and Apple interest in Tesla as a safety net.

Tesla has built a fantastic car brand, it is safe to say that other car makers are chasing Tesla's tail and looking up to it. If only their hurt pride were not in the way of publicly acknowledging the new Queen...

If things go pear shape in the world and Tesla starts running out of car buyers, the worst outcome may be some sort of partnering with one or both of these two. Tesla could be walking the financial fine line most of the time but bankruptcy, as predicted by shorts, is highly unlikely.

 

[GutenYe]

That's not going to happen. Even if someone to buy Tesla, it's going to be Google, Elon Musk is very close to Google CEO and Google's advantage in technologies and driverless car development will help a lot. And of course, Musk will not sell Tesla in near future.

 

[FluxCap]

Sort-of do... Here:
Self-Driving Car: Is it a big deal?

Hmm, interesting but I kind of meant in the investor's subforum. You or Robert can move my post if you like.

In retrospect I see this is the Apple thread, so my post should go somewhere else. Didn't we have a BEV competition thread somewhere?

Edit: found it and moved to BEV thread.

 

[electracity]

That's not going to happen. Even if someone to buy Tesla, it's going to be Google, Elon Musk is very close to Google CEO and Google's advantage in technologies and driverless car development will help a lot. And of course, Musk will not sell Tesla in near future.

I could see Tesla making the chassis for a low speed Google car. I don't see google making a car with a steering wheel. I don't see a fully functional all-speed autonomous car from anyone for fifteen years. I don't know that Google has much to offer Tesla. Google has pursued lidar based imagining. Tesla looks to be going with a deep learning vision system. Different approaches to the autonomous car.

Tesla and Google may be a good match in the transportation biz. I don't see how Tesla fits with Apple, unless Apple only plans to build a "Google car".

I don't know how Apple enters the car biz as a direct Tesla competitor. I don't think they do. I think they do a google car approach.