How Apple missed the chance to get behind Tesla's wheel

Musk tweeted that he reached out to Cook to discuss the possibility of Apple acquiring Tesla for "1/10th of our current value"
Last Updated 23 December 2020, 06:44 IST

Apple Inc. Chief Executive Officer Tim Cook refused to take a meeting years ago to discuss acquiring Tesla Inc., Elon Musk said on Tuesday.
Tesla CEO Musk said in a tweet that he reached out to Apple during the “darkest days” of development of his company’s Model 3 to talk about a possible deal. Musk said he planned to discuss the possibility of selling Tesla to Apple for one-tenth of its current value, indicating a valuation of about $60 billion.

In 2017, Tesla burned cash as it ramped up output of its mass-market Model 3 electric vehicle. Musk told employees then at the company’s Fremont, California, plant that it faced a period of “production hell” for six months or longer. Weeks after making that statement, he tweeted about sleeping on the roof of a factory as he tried to resolve bottlenecks.

That happened around the same time Apple decided to shift from development of a full-fledged Tesla competitor to an underlying self-driving car system. In recent years, Apple has hired a number of ex-Tesla executives who specialize in drive train, car interior and self-driving technology. It has also acquired companies that specialize in self-driving car development, indicating that the company is once again considering entering the market.

An Apple spokesman declined to comment on Musk’s remarks. Tesla did not reply to a request for a comment on the timing of the offer Musk described.

Shares of Apple and Tesla have surged since the beginning of 2017. Tesla has gained more -- roughly 1,400% -- but is still worth less than a third of Apple’s market capitalization. This week, Apple’s stock has climbed, while Tesla has slipped on a Reuters report that Apple is aiming to produce a driverless car for consumers in 2024.

Bloomberg News reported earlier this month that Apple shifted leadership of its car project to John Giannandrea from former top engineer Bob Mansfield, indicating its self-driving technology and artificial intelligence focus.

Musk’s comment about Apple came a day after Tesla joined Apple in the benchmark S&P 500 Index, capping a year in which its stock has surged. Investors have bid up the shares as the company has posted five consecutive quarters of profit.

Tesla’s travails continued into 2018 when Musk tweeted he had “funding secured” to take the company private. As a consequence, he agreed to pay $20 million to settle with the U.S. Securities and Exchange Commission but still faces an investor lawsuit. Tesla shares are up about 800% since that tweet.

(Published 23 December 2020, 02:37 IST)

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