Apple + Tesla Motors and Why Google Makes More Sense

Apple and Tesla

There have been rumors, and recently a confirmation, that Apple’s Merger and Acquisition Chief, Adrian Perica, met with Tesla Motors CEO Elon Musk. The meeting took place in the spring of 2013, and seems to suggest that Apple may want to break into a new product field, and a big one.  Apple CEO, Tim Cook, did say that Apple would be breaking into new markets in 2014.  Is this what he meant?  Probably not, but it does give us an idea where their head is at and how high their sights are set.

Acquiring Tesla Motors would make perfect sense for Apple on the surface.  The brands have a similar philosophy on brand and marketing.  Both brands are very high quality (and high dollar) and have the “cool factor” that consumers love.  This could mean the companies would be able to come together to create a uniform and very unique, very exciting product.

If Apple acquired Tesla, there would be one very important thing the company would get out of the deal, and it’s unrelated to cars:  Elon Musk.  Mr. Musk is the mind behind Tesla Motors, Space-X and the Hyperloop, and he played a very large part in the development and branding of (the sites largest shareholder when it was sold to eBay). He has a keen eye, a very inventive mind and is not afraid to try something completely new, and more importantly can come up with something original in the market.  Apple needs someone like Mr. Musk to be a sort of Director of New Products.  With the kind of cash Apple has lying around it is difficult to imagine the kind of ideas Mr. Musk could come up with.

Now, with all of that being said, I do not think this would be a successful merger.  Apple is known as the “premium” brand, which means that the car would be enormously expensive.  There is a stark difference between spending $500 on a tablet when you could spend $200, and spending $50,000 on a car when you could spend $20,000.  Apple is also a controlling bunch, and unless Mr. Musk was willing to sell outright, he would most certainly lose some control over his project.

So, you may ask, what company makes sense to buy this innovative and forward thinking car company? Google.  Google has got the money to give the company room to grow and expand quickly and aggressively, and on top of that, there is some background that explains why Google and Tesla would make a good match.  The most obvious note of this background is that Google has already been dabbling in cars with its self-driving car.  In addition, Google recently invested over $1 billion in clean energy sources (wind and solar).  With Tesla Motors being an electric car company, it seems to make sense that Google would have a similar interest in the clean energy opportunities that lie there.

It feels pretty easy to imagine Google and Tesla coming together to form an innovative vehicle that excels in technology and clean energy without being exorbitantly expensive.  All of these are goals that both companies seem to be striving for.  Also, Mr. Musk has said that he favors building a sub-$30,000 subcompact and building and selling electric vehicle powertrain components so that other automakers can produce electric vehicles at affordable prices without having to develop the products in house.  Sounds like a low price open-source philosophy, similar to another large company involved here.



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