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

[AmpedRealtor]

Where, exactly, does Apple plan on sourcing batteries for its mysterious "car"? There aren't enough batteries in the world to supply the types of volumes Apple is seeking... and I haven't read any articles of Apple building any gigafactories. Can Samsung and others provide enough custom batteries to Apple to satisfy what will likely be at least a few hundred thousand vehicles per year?

And how is Apple going to provide a decent range and access to a national charging network, all at a cost the average American consumer can afford? And how do they propose to sell such a vehicle, through their Apple Stores? Sure, Apple is making a car. Sure it is.

 

[LetsGoFast]

I found Elon's comments amusing, but I know for a fact that not all of the employees that Apple has hired from Tesla were fired. I know at least one employee who was poached whilst still in Tesla's active employ. The story I heard was that Tesla even made him a counter-offer to stay, although I don't know that particular claim to be a fact.

- - - Updated - - -

Where, exactly, does Apple plan on sourcing batteries for its mysterious "car"? There aren't enough batteries in the world to supply the types of volumes Apple is seeking... and I haven't read any articles of Apple building any gigafactories.

Assuming that Apple is still a number of years out, there is sufficient time for them to get another battery manufacturer spooled up to build batteries of a current design or a new one. Unlike automobile companies, Apple has considerable expertise in the design, specification and manufacture of lithium ion batteries. They have a significant patent portfolio for specialized battery design, especially in the area of cell geometry, achieving higher energy densities. They were sued by A123 Batteries for poaching researchers (who worked on Fiskar), including their former CTO. A123 alleged that Apple also hired battery engineers from SiNode Systems, Samsung, Toshiba, LG, and Panasonic. To be honest, there is probably not a company in the world better positioned to compete on battery design and manufacture than Apple. Tesla obviously has a significant advantage, but if the key qualification to make an electric car is expertise in battery technology, Apple is a much more formidable rival than conventional auto manufacturers.

For what it is worth, Apple could build out a new battery factory in China and you'd not read one word about it until after they were selling the product.

 

[tftf]

Where, exactly, does Apple plan on sourcing batteries for its mysterious "car"? There aren't enough batteries in the world to supply the types of volumes Apple is seeking... and I haven't read any articles of Apple building any gigafactories. Can Samsung and others provide enough custom batteries to Apple to satisfy what will likely be at least a few hundred thousand vehicles per year?

Apple has dozens of suppliers in China that most people haven't heard about. Foxconn is maybe the only household name (and a potential manufacturing partner for Apple cars one day):

http://www.ft.com/cms/s/0/d70fca52-2691-11e3-9dc0-00144feab7de.html#axzz3o5AZXqTR

They also have in-house expertise in this field already, shipping millions of PCs and CE devices per year:

Apple’s battery breakthrough is already paying dividends in Apple’s super-slender MacBook. In order to achieve that 13.1 mm silhouette—and still deliver reasonable battery life while powering a 12-inch Retina display—the company’s engineers had to develop something entirely new. What they came up with is a terraced battery cell, a unique design that adds 35 percent more battery capacity than would otherwise be achievable.
“It might seem like a low level innovation, but it’s an incredibly clever design,” Jeff Chamberlain, executive director of the Joint Center for Energy Storage Research, told WIRED. In fact, it’s a whole new way of thinking about batteries.

http://www.wired.com/2015/03/apples-new-battery-tech/

How come we hear so little about all of this? Apple doesn't publicly talk about future plans until it's very close to the unveiling/on sale date, be it in new or existing sectors. Also see the two new campus projects in California capable of housing thousands of new employees. Hard to imagine these are only for PC/CE projects.

Finally, with close to $200 billion in cash, Apple has enough funds to go forward with battery supply, contract manufacturing and after-sales servicing and charging networks as they see fit once the car is ready to go into production.

As I quoted in another topic on Apple's potential entry into EVs and contract manufacturing options:

Apple has a very interesting global manufacturing supply chain relationship. It basically doesn't make anything "internally," but instead relies on sourcing from suppliers (most of them based in Asia) while at the same time pre-purchasing equipment and often gaining exclusive control for important technologies. Some observers call Apple a "bank" with regard to its relations with key suppliers:

• From a fiscal perspective, Apple is acting like a trade lender (with moderate to low returns on capital.)
• From the operational perspective Apple is acting as a limited manufacturing partner, just short of an equity holder.
• From a strategic perspective, the Bank of Apple lends only to suppliers that commit to producing for Apple Inc. Thus locking out competitors. (Source)

I think this is an excellent summary, parts of which could be applied to the car industry in the future:

Car contract manufacturers such as Valmet or Magna Steyr may not be able to fulfill future Apple's unit sizes at the moment, but neither could most of Apple's current manufacturers some years ago - that's exactly why Apple enters into pre-purchase agreements for key equipment and provides tooling and cash injections for its suppliers.

In fact, Apple may not even need to change suppliers. Many Apple investors may have glanced over the news that Foxconn has revealed it's in the business of making EVs since 2014:

No link here since it's my own article.

 

[rallykeeper]

Wading in...

Love the enthusiasm from Elon. I have no issues with him critiquing Apple's ability to make a car, but he should perhaps steer clear of criticizing Apple's core competencies.

The watch comment in particular makes him sound like a nut who hangs out with Larry Page trash-talking Apple.

I liken it to the Donald Trumps of the world who hear that there's no such thing as global warming from their natural resource friends. Those ideas bounce around their Fox news-fueled echo chamber and become a sort of truth to them. They repeat it with such casualness, but they haven't really given it any analytical thought. It's just something they've heard.

Same thing seems to happen in Silicon Valley with Apple. (Both pro and anti Apple). I seriously doubt that Elon has had the time to try out an Apple watch, compare it to its competitors, understand its limitations and capabilities, etc. Moreover, while Elon is obviously a genius, he can't understand the challenges of every single product category. To his credit, he still admits he struggles to anticipate the challenges of producing a car.

Apple isn't the largest company in the world by accident, it obviously produces products that people want. The Valley's echo chamber (and Internet chat rooms) may have issues with their approach, but sales figures don't lie.

An aside...

He didn't do so here, but on the subject of software development itself, he really ought to avoid trash-talking. Tesla's pace of development is relatively abysmal (understandably due to limited resources) and their record of releasing buggy software is pretty poor (not so understandably since us early adopters are far more willing to tolerate bugs than public-at-large). We're on v6 something at this point and I have to restart my center screen 2-3 times/month to get things working again?

 

[Owner]

I think this somewhat minor comment is being blown up.

Although I think it is childish, trash talking other people in the valley is very common. Although I'm generally an Apple fan, I have no interest in their watch. I'm not much of a Google fan - they don't treat their gazillion contractors well.

To put this in context. I recently met someone I had not seen for probably 15-20 years. To my surprise, there was trash talk of another company in an old industry. I was quite surprised and responded with "wow you've really drank the kool aid?"

The watch comment in particular makes him sound like a nut who hangs out with Larry Page trash-talking Apple.

 

[liuping]

I found Elon's comments amusing, but I know for a fact that not all of the employees that Apple has hired from Tesla were fired. I know at least one employee who was poached whilst still in Tesla's active employ. The story I heard was that Tesla even made him a counter-offer to stay, although I don't know that particular claim to be a fact.

Maybe they fire the employee's when they don't accept a counter offer. That would make Elon's statement technically correct.

 

[aznt1217]

I think this somewhat minor comment is being blown up.

Although I think it is childish, trash talking other people in the valley is very common. Although I'm generally an Apple fan, I have no interest in their watch. I'm not much of a Google fan - they don't treat their gazillion contractors well.

To put this in context. I recently met someone I had not seen for probably 15-20 years. To my surprise, there was trash talk of another company in an old industry. I was quite surprised and responded with "wow you've really drank the kool aid?"

It's really being blown way out of proportion now. You should see the comments on these sites. It makes me lose faith in humanity. That, and in the words of Musk: "We've grown too soft."

 

[Quant]

Wading in...

Love the enthusiasm from Elon. I have no issues with him critiquing Apple's ability to make a car, but he should perhaps steer clear of criticizing Apple's core competencies.

..............

An aside...

He didn't do so here, but on the subject of software development itself, he really ought to avoid trash-talking. Tesla's pace of development is relatively abysmal (understandably due to limited resources) and their record of releasing buggy software is pretty poor (not so understandably since us early adopters are far more willing to tolerate bugs than public-at-large). We're on v6 something at this point and I have to restart my center screen 2-3 times/month to get things working again?

I agree ! It's about time Tesla and Elon Musk fixed these issues. Apple could have a field day criticizing the buggy Tesla software but I suspect they won't.

They are not so childish.

I wish right now Elon would stay highly focused to production issues wrt Model X. It's great to have Model X demand but without production it means very little. Trash talk is cheap, delivering on your production is difficult. Stay focused and do not be distracted by doing useless press interviews .

 

[tftf]

Oh, one more thing: Maybe someone can explain this simple conundrum to me:

Aren't these remarks a bit of strange behavior for a man who previously invited (even begged) all major car companies to produce more EVs as soon as possible to "save the planet"?

In comes Apple with billions of $ and (apparently) starts working on an EV, hiring hundreds of experts...but all they get is trash talk instead of a 'thank you and please ship this car asap'.

 

[DriverOne]

I don't understand why Elon feels the need to go out insulting Apple. He's done it before, about how much cash they spend.

Suggesting that all Apple does is call Foxconn once a year and ask "build us a new iPhone" sounds so ignorant, it's hard to believe this is Musk talking. It makes me start to doubt other things he might say. After all, originally Tesla asked Lotus for a car (it didn't work out so well as they hoped).

To say Apple is a "graveyard" is ludicrous.

Palm CEO, 2006: "PC guys are not going to just figure this out. They're not going to just walk in."
Tesla CEO, 2015: ditto

Musk sounds like the incumbent, not the disrupter.

If Musk's mission is really to speed the journey to electric transportation, why diss a company strongly rumored to be joining in that journey? Why isn't he encouraging them? He's giving away patents to Apple and all, why mock if some employees go that way too?

Instead of encouraging a strong ally for EVs, he's burning bridges.

Something has happened to make Musk angry at Apple. That's a shame. Perhaps he is in fear of a future competitor, and taking jabs while they can't fight back.

Sad to watch this.

 

[anticitizen13.7]

I don't understand why Elon feels the need to go out insulting Apple. He's done it before, about how much cash they spend.

I completely agree.

There's no need to pile on, especially at a time when Apple seems to be under attack from all corners. Even much of the Apple fan base has been relentlessly critical in the post-Jobs era.

 

[MikeC]

C'mon, guys, the man says what's on his mind and that's always been the case. People should know by know that he won't sugarcoat his opinions to spare anyone's feelings. He was asked a specific question about poaching of engineers, which was a big FUD story and may have affected the short-term share price. He answered the question honestly from his perspective. Is anyone really suggesting that his comment is going to change the rate at which Apple develops their car? Nothing wrong with a friendly rivalry, we know he's on good terms with Jony Ive.

 

[ludicrousspeed]

Tesla employee on Elon Musk's Apple slam - Business Insider

This is a great read and definitely lightens up the situation.

 

[hobbes]

As someone who admires Elon Musk hugely, and would actually take a real bullet for him, I was quite disappointed by his some of his latest comments about Apple.

1. Why say bad stuff about your former employees? How will current employees feel about that ? I cannot believe that this is wise, respectful, or helpful in any way for recruiting or retaining great engineers. Calling Apple the graveyard for Tesla engineers who could not make it at Tesla! Were ALL Apple hires actually fired by Tesla? If not, could there be lawsuit here by one of the former Tesla engineers ? You think those humans who went to work at Apple have zero friends at Tesla who care about them and their friendship ? Come on Elon....think for heaven's sake !! Is all this money and net worth going to your head and your ego?

Apple has money and muscle, they could be upset by what Musk just said and offer $10 million signing bonus to his absolute best engineers and a ton of stock options, and even a guaranteed 5 year contract and blow $ 50 million without batting an eye?

What will Elon Musk then do ? Want to play chess with Apple's cash hoard ?

2. Trying to call out the Apple Watch, the new large iPad and the stylus etc as examples of no real innovation is something that I agree with......but given they are both Silicon Valley companies, and Apple is nowhere near taking any business from Tesla from any of their current products, in terms of revenues, that was totally unnecessary , in my opinion.

It will piss off a lot of people at Apple, and they will now be more determined.

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 !

I think Elon does need a vacation. I think he is super stressed out and it shows ...with the crying and the rest of this stuff.... in the other recent interviews !!

I strongly suggest Tesla FOCUS on their work!!! We are your investors! Elon Musk you have fiduciary duty to us !

1. Get the Model X production issues solved .

2. Get the Gigafactory up and running and launch the energy storage business.

3. Unveil the Model X and Y

and take the HIGH ROAD !!!

I totally agree with everything else that Elon said, for example, Apple can't exactly outsource the production of a car to a supplier like Foxconn. I think Apppe will fail if they try to manufacture a car!

I believe Tesla has a huge opportunity to be a huge company and this kind of idiocy is just not something I expected from someone of Elon's intellectual and strategic caliber ....or wisdom !

+1

Definitely not good style. When people start talking others down, it usually means they are not happy with themselves really. I liked how Elon talked about diesel gate when he was in Europe, not making fun or pointing fingers at VW and others - this is just the opposite.

 

[Ocelot]

+1

Definitely not good style. When people start talking others down, it usually means they are not happy with themselves really. I liked how Elon talked about diesel gate when he was in Europe, not making fun or pointing fingers at VW and others - this is just the opposite.

+2.

It is fine to argue and disagree with others. But there is no need to belittle people.

 

[RobStark]

+1

Definitely not good style. When people start talking others down, it usually means they are not happy with themselves really. I liked how Elon talked about diesel gate when he was in Europe, not making fun or pointing fingers at VW and others - this is just the opposite.

Definitely good style. When Elon was in Germany he was a guest in a foreign country with a different language and culture. Default position in those situations is always be super polite.

What we have here is Silicon Valley smack talk. Some people are just a little too sensitive.

I like the subtle digs between Tesla and GM too. When GM says they are building cars not just for the elite or talk about price of their batteries not being dependent on large capital expenditure or large volume sales.

 

[Krugerrand]

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

I have and I thank him to this day. Outstanding orthopedic surgeon with the bedside manner of a porcupine, the latter entirely irrelevant to his ability to do what he does best - put broken body parts back together again. I also know a number of nurses with many tales of arrogant doctors being jerks. It's not really a rare occurrence in the field (or any field) when you're dealing with the very best in the world. Besides, being a jerk doesn't mean you aren't good at your craft or can't be good at your craft or that you'll fail at your craft.

 

[SlyWombat]

He just tweeted that he does not hate apple... Elon Musk on Twitter:

 

[EVNow]

This makes absolute sense to me - this trash talking. Not that I condone such talk.

Musk is worried about Apple - not about the car they may make - but about them poaching Tesla employees. May be he (and others at Tesla) hope that calling Apple "Tesla graveyard" will prevent some employees from leaving.

 

[CALGARYARSENAL]

Musk says the iWatch isn't compelling yet. How about he spends less time trash talking and more time fixing his uncompelling Model X that has no utility and barely any sport?