Elon Musk says some unwise things about Apple and their hires from Tesla !

[FredTMC]

I have to admit, Elon's quote did lack a bit of tact. But I love his confidence. So it all balances out for me. Also, I think there was some humor in it as well and shouldn't be taken completely seriously.

Here's the full interview:
interview link

thx for the link!

for me, this obvious solution to the Apple challenges is for Google to set up and make an investment in Tesla. A couple billion dollars would do it. They'd be getting a great price these days. it's "Pirates of Silicon Valley part Deux"

 

[RobStark]

I do think if Apple does try to build an EV they may try a JV with BMW or Mercedes, probably the former.

And Apple could easily drop $30 Billion cash into a JV and lock up some battery supplier contracts and lithium too !

My point is ( if as I believe APPLE is not actually looking to build an EV themselves ) , why goad them into a huge JV with BMW ? How does that help TESLA investors ??

How does this harm Tesla investors? Tesla is not competing against other EVs but the 88M ICEv streaming out of factories every year.

If Tim Cook decides to invest $20B or $40B largely or partially on an insult by Elon Musk then Tim Cook is a moron. And I don't think Tim Cook is a moron.

If Apple enters the BEV space with two feet it validates the BEV market. Dominating a market with one serious supplier is not viable long term. If Apple is producing 100's of thousands of BEVs then Apple becomes an indirect collaborator. It makes suppliers join the space. Suppliers are not likely to make large investments in BEV specific parts if their only possible volume buyer is Tesla. More kids joining engineering programs relevant to BEV engineering and moving to Northern California etc etc etc.

 

[perkiset]

Meglomaniacle rant. Musk == Jobs. They have to be the most confident people in the world to do what they do.

So in that context, meh. But in a human context, call Vanna and buy a clue. As much as I love both Tesla and Apple, the sun does not rise or set on either of them. I don't think I'd want to have sat down and have dinner with either of them. As idealogues and bellweathers they are brilliant and necessary. As truthsayers, they leave a lot to be desired.

 

[CHG-ON]

You would really take a real bullet for him? Not worth it.

 

[ecarfan]

Dave, thanks for the link. I loved that interview. Classic Elon, just speaking his mind. This is my favorite quote, regarding German car. companies:
"The senior management is too old-school. They’re not accepting the future yet. Germany needs to move to the next level of technology. The country was a pioneer in internal combustion technology. But if you cling to the past, you won’t get to the future. It’s time to start building a fundamentally new generation of cars."

I have to admit, Elon's quote did lack a bit of tact. But I love his confidence. So it all balances out for me. Also, I think there was some humor in it as well and shouldn't be taken completely seriously. Here's the full interview:
interview link

 

[StephenM]

Thanks for the link to the full interview. When put into full context the jab isn't as bad as the link-bait articles would suggest. It's classic Elon. Don't mind it a bit.

 

[Auzie]

I do think if Apple does try to build an EV they may try a JV with BMW or Mercedes, probably the former.

And Apple could easily drop $30 Billion cash into a JV and lock up some battery supplier contracts and lithium too !

My point is ( if as I believe APPLE is not actually looking to build an EV themselves ) , why goad them into a huge JV with BMW ? How does that help TESLA investors ??

If the cash was the secret sauce ingredient that makes for the disruption in the auto industry, we would have had much better cars many many years ago. Apple having cash does not easily translate into Apple being successful in icar endeavour, whatever icar endeavour means.

I see few obstacles to Apple endeavours in this space, although the obstacles are not insurmountable:

Apple is not as hungry for success as the Tesla start up was - is there enough drive to push into a difficult space which is not Apple's core capability? Apple can safely plod along and collect cash by doing what it does best. Someone fighting for survival fights much harder than someone who will be ok in any case. The one fighting harder becomes a better fighter if they survive...

Apple is developing icar capability along their main lucrative business as a side endeavour. Focus on a peripheral capability is not the same as a 100% focus on a single core capability.

If Apple does not own icar supply chain and manufacturing, it does not own the icar making business. I see potential Apple - BMW JV unlikely due to remote incompatible business cultures. I find it more likely that Apple could buy out some smaller car maker. Tesla could be an ideal acquisition target for Apple if it were for sale.

On the subject of Elon's words on former employees, the way I read it the dig was aimed at Apple rather than at former employees. The way the dig at Apple came out, former employees got to be a collateral damage. The only way to never make a mistake with words is to never speak, so let's cut him some slack.

 

[schonelucht]

If Apple does not own icar supply chain and manufacturing, it does not own the icar making business.

I disagree. The promise of EVs is that they are harder to develop but easier to manufacture than ICEs. It could very well be that at some point, the manufacturing of a car becomes more or less a commodity that you outsource to the Foxconns of this world. With the real value remaining in the IP on auto-driving, brand loyalty, battery technology, network effects from scale (car-sharing models), etc...

 

[Auzie]

I disagree. The promise of EVs is that they are harder to develop but easier to manufacture than ICEs. It could very well be that at some point, the manufacturing of a car becomes more or less a commodity that you outsource to the Foxconns of this world. With the real value remaining in the IP on auto-driving, brand loyalty, battery technology, network effects from scale (car-sharing models), etc...

Someone must take care of car making including supply chain issues. The caretaker inherently owns the car making business as any other arrangement would not work for the caretaker. Why own all the risk and hard work and let someone else eat your cake?

The main value adding for ice car makers is in developing the supply chain, the engine manufacture and the final assembly. It is similar for bev car making, we just have the battery powertrain instead of the engine. Anyone that owns these activities does not need Apple or someone else to tell them what to do or how to run their business imho.

It might be quite difficult for other businesses including Apple to compete for a piece of car making value adding pie if they choose to outsource the supply chain management, the power train development and manufacture and the assembly.

 

[schonelucht]

Someone must take care of car making including supply chain issues. The caretaker inherently owns the car making business as any other arrangement would not work for the caretaker. Why own all the risk and hard work and let someone else eat your cake?

Because the main risk is not in manufacturing anymore, which is a well understood process, but in developing all the technology (battery and autodriving f.e.) to make a modern car tick. It's a model that already exists. The moment Apple is ready with their development it can go to VDL Group and they will more than happily produce their car through their NedCar subsidiary, like they currently do for BMW with the mini. Takes about 18 months for them to tool their factory.

The main value adding for ice car makers is in developing the supply chain, the engine manufacture and the final assembly. It is similar for bev car making, we just have the battery powertrain instead of the engine.

If you truly believe that, then why invest in Tesla? The disruption Tesla stands for is just the reverse : Tesla is/was the darling of the Street not because it is an exceptional manufacturer or a perfect manager of the supply chain. On the contrary, by it's own admission : that is what they are WORST at. Tesla is valued (and presents itself as such) because of everything else. Having a sharp and focused R&D free from legacy thinking, owning worldwide charging infrastructure, innovating in the business model and customer experience (direct sales and 'free charging'), pushing the envelope in applying IP to cars (connected car, autodriving, ...), being able to command an Apple-like brand loyalty etc...

 

[Owner]

I think Yahoo re-quoted him and the context was a wee bit lost, because the interview's question used some salient words: "Tesla's most important engineers." With that context, its typical valley speak.

Apple just hired some of Tesla’s most important engineers. Do you have to worry about a new competitor?
Important engineers? They have hired people we’ve fired. We always jokingly call Apple the “Tesla Graveyard.” If you don’t make it at Tesla, you go work at Apple. I’m not kidding.

 

[mrdoubleb]

Just because Musk does not live under the Apple Reality Distortion Field, it does not make his statements unwise.

 

[Auzie]

Because the main risk is not in manufacturing anymore, which is a well understood process, but in developing all the technology (battery and autodriving f.e.) to make a modern car tick. It's a model that already exists. The moment Apple is ready with their development it can go to VDL Group and they will more than happily produce their car through their NedCar subsidiary, like they currently do for BMW with the mini. Takes about 18 months for them to tool their factory.



If you truly believe that, then why invest in Tesla? The disruption Tesla stands for is just the reverse : Tesla is/was the darling of the Street not because it is an exceptional manufacturer or a perfect manager of the supply chain. On the contrary, by it's own admission : that is what they are WORST at. Tesla is valued (and presents itself as such) because of everything else. Having a sharp and focused R&D free from legacy thinking, owning worldwide charging infrastructure, innovating in the business model and customer experience (direct sales and 'free charging'), pushing the envelope in applying IP to cars (connected car, autodriving, ...), being able to command an Apple-like brand loyalty etc...

I disagree that car making business can be outsourced effectively, it is too difficult and full of risks. Simpler non-value adding activities are usually outsourced. Whoever owns these difficult bits is perfectly capable of doing anything else they wish to do, they do not need a parent.

My main reasons for investing in Tesla:

1. Tesla has the first mover advantage in making electric cars. The 3 main characteristics of the first movers are present to various degrees:

Technological leadership - powertrain and car control system, over the air upgrades, etc;
Preemption of scarce assets - gigafactory and superchargers;
Switching costs and buyer choice - outstanding Tesla brand.

2. No competition. It is extremely difficult for ice car makers to transition to new technology, if possible at all. I expect it to be a slow and an unwilling transition for the ones that transition.

3. All the hype, drama, powerful unfolding story, great cause - it is addictive and it is an opportunity to be a small part of it in the right way

 

[schonelucht]

I disagree that car making business can be outsourced effectively, it is too difficult and full of risks.

The reality is that it can and it happens. Today. I already gave an example. Simply denying a reality doesn't make it so.

My main reasons for investing in Tesla:

1. Tesla has the first mover advantage in making electric cars. The 3 main characteristics of the first movers are present to various degrees:

Technological leadership - powertrain and car control system, over the air upgrades, etc;
Preemption of scarce assets - gigafactory and superchargers;
Switching costs and buyer choice - outstanding Tesla brand.

2. No competition. It is extremely difficult for ice car makers to transition to new technology, if possible at all. I expect it to be a slow and an unwilling transition for the ones that transition.

3. All the hype, drama, powerful unfolding story, great cause - it is addictive and it is an opportunity to be a small part of it in the right way

Just earlier you were claiming the main added value for car manufacturers is developing the supply chain, manufacturing and final assembly. Yet none of the reasons you invest in Tesla have anything remotely to do with those. I think that very well proves my point.

 

[aznt1217]

It would be so ironic if Tim Cook helped Tesla with supply chain haha

 

[pGo]

Because the main risk is not in manufacturing anymore, which is a well understood process, but in developing all the technology (battery and autodriving f.e.) to make a modern car tick. It's a model that already exists. The moment Apple is ready with their development it can go to VDL Group and they will more than happily produce their car through their NedCar subsidiary, like they currently do for BMW with the mini. Takes about 18 months for them to tool their factory.

Vehicle Engineering - Contract Manufacturing


WSJ even speculated that Apple may work with Magna to contract manufacture cars.

 

[uselesslogin]

Why go stoke people who have deep pockets ? What do you gain ? What exactly is the risk- reward calculation here? I'd say that was definitely NOT smart, for a strategic guy, who is also a very shrewd businessman, Elon, sorry but that was not thought through !

Well, theoretically Elon would be happy to see the world filled with electric cars even if it ends up being that he stoked Apple and they took over. In reality I would think that he really does have an ego and he wants Tesla to be the best and the leader but still he is driven by his belief that the human species should survive and things need to be done to ensure that.

 

[Drax7]

If that statement from Musk surprises you , you don't know Musk very well, he's known to be a jerk of a boss. I respect his accomplishments but he's definitely a graduate of the Steve Job's school of dictatorial bosses.

And you'd really take an actual bullet for some guy you don't even know because you like the car? This isn't a cult, you can relax a little.

ive never met an arrogant Doctor that behaves like a jerk with his patients

 

[AmpedRealtor]

Good for Musk! There is no innovation currently at Apple. They give us a bigger iPad with a pen - something Steve Jobs railed against - and a phone that feels like a piece of coal stuck to the back of your wrist. Innovation at Apple nowadays means offering $500 wrist bands in various different styles. Apple completely ignored what customers were actually asking for - a bigger iPad that runs a full version of Mac OS X, not unlike the Surface Pro 4 which runs a full version of Windows 10. Not only would this expand Mac OS market share, but it would give us true "pro" functionality and access to real "pro" applications like full versions of Adobe Photoshop, Illustrator, and other applications many of us use on a daily basis on our desktops. But no, Apple prefers to keep shaking the iOS cash tree until there's nothing left.

I welcome a war of words between Apple and Musk. I'm getting my popcorn... Bring it!

 

[scaesare]

ive never met an arrogant Doctor that behaves like a jerk with his patients

That's it. Perhaps Musk is more Dr. Jed Hill than Steve Jobs: