Apple and Tesla had a spring fling
By Greg Barto From Tech Crunch
Reports are out today in The San Francisco Chronicle, and just about every other tech publication, that Apple could be in preliminary talks to buy electric automobile manufacturer Tesla. With the mobile phone and tablet markets becoming increasingly competitive, Apple is interested in expanding to other markets to increase growth.
But would Apple want to buy a company valued at $25 billion at closing? With nearly $160 billion in cash, money probably wouldn’t be the primary hurdle Apple won’t clear. In fact, Apple could be the only company capable of thinking about it. An acquisition like this makes sense for Apple as it would satisfy their need to enter new markets with tremendous growth potential.
Tesla has been on a tear recently, with strong stock growth and car sales YoY. Tesla has released two cars so far — the Roadster and the Model S — and its crossover model, called the Model X, will begin deliveries later this year with new-reservation deliveries due next year, according to its website. Its stock is up nearly 500 percent from a year ago and investors couldn’t be happier. Tesla has also scored well with Consumer Reports, tying the highest score ever given to a car and pioneered new financing opportunities to make the Tesla affordable.
The speculation comes from a meeting that happened last spring between Elon Musk and Apple M&A executive Adrian Perica. However, most analysts have said it’s unlikely a merger is in the works, and instead point to a potential partnership around the new battery plant that Musk has alluded to in the past. As much as we’d like to believe the Apple experience could be coming to the automobile industry, it doesn’t make sense for Tesla at this point.
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