Apple reportedly offered to buy Tesla for more than it is worth today in 2013, but a demand for boss Elon Musk to be left out of the acquisition thwarted the deal.
The claim came from Roth Capital Partners analyst Craig Irwin, who told CNBC: "Around 2013, there was a serious bid from Apple at around $240 a share."
This is comfortably above what Tesla is worth today (around $194 per share), and also above its value in 2013, which varied wildly from a low of $37.50 to a year high of $193.
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Irwin added: "This is something we did multiple checks on. I have complete confidence that this is accurate. Apple bid for Tesla. I don't know if it got to a formal paperwork stage, but I know from multiple different sources that this was very credible...my understanding is Apple wanted Elon Musk to step away, and that was a deal killer."
This isn't the first time news of Apple considering buying Tesla has emerged. In 2014, Adrian Perica, then Apple's mergers and acquisitions chief, reportedly met with Tesla boss Musk in Apple's hometown of Cupertino the previous spring — fitting neatly into Irwin's own timeline.
Here's why Apple may have wanted Tesla: Apple is very good at what Tesla is bad at, namely, mass-producing goods in a timely fashion with consistent build quality. On the other hand, Tesla likely holds answers to Apple's long-held desire to build a car, thanks to its industry-leading battery technology, vehicle performance, and global Supercharger network.
But investor Warren Buffet doesn't see it this way. Speaking to Fox Business News in 2018, he said Apple investing in, or buying, Tesla would be a "very poor idea," adding: "It's not an easy business. You can win in auto one year and lose the next. You've got a dozen big companies out there with resources. They're going to keep coming. They're going to copy what you do."
And yet, it still makes for a profound question. What if Apple decided it would part with the $30-$40 billion required to buy Tesla?
The two companies have a fair few similarities. Customers who cheer at Elon Musk every time he walks on stage mirror the admiration projected at Steve Jobs during each of his famous product launches. Those same fans then line up, often overnight, outside Tesla stores to get their names in the order book for a new car — as iPhone fans have done for the past decade.
For all of their faults — and there are plenty, from build quality failings to Autopilot concerns — the way Tesla cars operate, mirror Apple's old motto of "It just works." Walking up to a Model 3 and having it unlock because it senses the Tesla app installed on the smartphone in your pocket is a seamless experience. So too is the Supercharger network. It may cost money to use now, but it 'just works' in a way public charging stations rarely do.
Tesla's fondness for minimalist design fits neatly with Apple's own aesthetic sparseness, with the wooden trim of the Model 3's dashboard reminding us of the tables in Apple's retail stores. The two companies also pitch at the premium end of the market ($35,000 Model 3 notwithstanding), and each company appears to be on a mission far greater than selling consumer products — what with Tesla's goal of reversing climate change, and Apple's drive into healthcare via its ECG-equipped smartwatch.
Both Musk and Apple design chief Jony Ive are fans of British sports cars; Ive prefers Aston Martins, while Musk blew some of his PayPal windfall on a $1M McLaren F1 (before totaling it).
That last point however, Musk's apparent recklessness, is where Apple and Tesla set off on different paths.
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In a world where consumer faith in technology companies to do the right thing ebbs away via Facebook scandals and data misuse, Apple says no to the FBI's iPhone backdoor request and makes claims about consumer security and privacy which feel more genuine than those made elsewhere in Silicon Valley. Apple's sensibilities can arguably stretch too far, however, given reports that its upcoming TV service will take a squeamish stance on violence and adult content — both cornerstones of some of Netflix's biggest shows.
Contrast this to Musk, the chief executive of a public company who, on Twitter, is often found sailing close to the wind, where the impact of his tweets range from giving the Tesla PR department a headache, to earning a fine from the US Securities and Exchange Commission, which ordered him to step down as company chairman.
No wonder Apple's alleged bid for Tesla in 2013 demanded Musk not be part of the deal.
It's a shame Musk has this self-destructive streak to his personality, because when it is reined in a little and focused on his products, Tesla cars shift into a gear the rest of the market cannot reach. They have a personality and a sense of humor thanks to numerous 'Easter eggs' hidden throughout the software. For example, you can't change the navigation map to Mars in a BMW.
This of course raises the question, would Tesla be as popular today if it had been swallowed up by Apple back in 2013? The Model S was just a year old, while Models X, 3 and Y sat patiently on the drawing board, along with solar roof tiles, house batteries, trucks and the Autopilot driver assistance system.
It is extremely unlikely that Apple would have pushed ahead with Autopilot as quickly as Tesla did — a speed which scared off one-time computer vision partner Mobileye, in the wake of the 2016 death of a Tesla driver using Autopilot.
It is also somewhat unlikely that Apple would have stuck to Musk's roadmap of using the profit earned from a luxury electric car to produce an affordable EV (electric vehicle) for the masses, in the Model 3. Making affordable products for everyone is not something Apple does; instead, it somehow convinces the masses to part with $1,000 for a new smartphone each and every year, albeit in falling numbers of late.
Apple also showed interest in working with BMW and its electric i3GearBrain
Apple might have physically downsized Tesla's vehicles, resulting in something similar to the Model 3, but the company is unlikely to have compromised on quality and luxury to achieve a barely-possible $35,000 price tag. Accustomed to a near-40 percent profit margin, Apple would surely have balked at the circa-8 percent generally earned by car makers, even without chasing the mass market, where profits are razor-thin.
What about using Tesla technology to create a transport solution? This is what Apple is believed to now be working on, as its secretive Project Titan division shifted gears when the company better understand the difficulties of producing a new car from scratch - pains Musk is all too familiar with after enduring Tesla's "production hell."
Apple could have taken Tesla's electric powertrain tech, along with its early work on Autopilot, and combined this with its own efforts to create an autonomous ride-sharing vehicle. We may even have seen such a thing at the new Apple Park campus, silently and autonomously shuttling workers from the parking lot, or even to their homes.
But is this the Apple way? A public transit solution lacks the glamour Apple bakes into its other products, and any work on autonomy will surely raise a great many cautious eyebrows in Cupertino. Tesla seems to have somehow shrugged off three deaths where Autopilot was active, but we can't see Apple ever risking that situation in the first place, let alone getting away with it almost unscathed. A few iOS blunders aside, Apple's image is too highly polished to let itself get caught up in the twisted metal of a very public car crash.
What if Apple took Tesla's roadmap from 2013 and jumped ahead a decade? This would see it ditch Musk's wholesome EVs-for-everyone dream, and instead offer the outrageously fast, expensive and luxurious Tesla Roadster. This car, due in 2020 and expected to leave gas-powered supercars wondering where it went, is where we could see Apple, a company obsessed with speedy gadgets, ending up, had it bought Tesla.
Indeed, Apple visited British supercar maker McLaren in 2016 to talk about what each company did, but contrary to rumors of an acquisition, these talks "never matured to a definitive proposition," McLaren CEO Mike Flewitt told Reuters. Apple is also said to have spoken to BMW about a joint venture with its i3 electric city car, but nothing came of that either.
Apple's automotive ambitions have since reversed back into the shadows, with Project Titan now focused more on software (mapping and potentially automation) instead of actual vehicles with glowing Apple logos on their hoods. Although it certainly has the cash, perhaps Apple felt delivering an Ive-designed electric car, sold alongside Macs and iPads, was a step too far.
Fast-forward to the present day. Tesla's share price is at its lowest point since January 2017, and Musk's latest all-staff email (promptly leaked to the press, as always) claims the company only has enough cash to survive for 10 more months. A buyer could soon be needed but, despite the excitement it would certainly ignite, Apple is not the hero Tesla needs. As much as Musk would resent it, Tesla needs a legacy carmaker like BMW, Daimler or the VW Group to open its checkbook and give it the scale - and stability - it desperately needs.
But, just as Apple insisted back in 2013, we cannot see any takeover bid allowing Musk to remain in the driving seat.
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