CHINA TOPIX

11/21/2024 11:38:39 pm

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Apple Investors Want Tesla Motors

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(Photo : Reuters) Apple's investors want CEO Tim Cook to splash the cash.

Apple investors are eager to see the iPhone maker shell out a few billion on to aacquire Tesla Motors, one of the most iconic electric car makers in the world.

Rumors of the acquisition have floated around for a few months, bolstered by the reports Apple is making an electric self-driving car to launch by 2020.

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Tesla Motors is currently valued at $25 billion, but Apple could look at a triple premium for the electric car company at $75 billion to win over CEO Elon Musk.

There are worries that even if Apple offers this premium, Tesla will not deal. First off, Musk seems keen on keeping the automotive company in his ownership, and Apple may drive away from pursuing open patents and free charging.

Musk has made it clear Tesla is not a company made for making money, even though that would be nice, but to further electric cars and bring on the advent of mainstream electric car adoption.

Unless Cook can promise these charging stations and patents will remain open, which we highly doubt will happen with Apple in charge, it looks like a no deal.

There's also a part on Apple's side that makes it hard to imagine Tesla Motors being acquired and that's the fact all manufacturing is done by the company instead of being outsourced to a Chinese or Taiwanese company.

Cook was the pioneer of outsourcing in the 1990s and saved Apple from bankruptcy. It's something often overlooked but without the move away from its own factories, Apple would have had to file for bankruptcy.

It probably doesn't sit well in Cook's mind to have factories once again. When Apple makes its own electric car, it will no doubt employ various contractors to work on a few parts, assembling it somewhere in Europe for shipping worldwide.

This means even if Apple investors want the move to happen, both companies have their issues with one another. It will take a lot of compromise to get to a happy medium.

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