Steve Jobs wanted to build an electric car back in 2008. In 2014, Tim Cook reportedly funded such a project. So far, Apple hasn’t shown anything related to building a car, but there are rumors that an Apple EV will be launched in 2025 – don’t forget that in the near future, electric cars will become common commodities. Google already had a self-driving electric car four years ago, although its electric car research and development focus will be on software development, relative to Apple.
No other company has been able to produce anything like it for six years since Tesla announced the delivery of the Model S a decade ago. The big automakers claim they will soon overtake Tesla, but even the strongest offerings — BMW and Mercedes — are little more than beefed up tape players trying to compete with the iPod.
Through trial and error and constant delays in deliveries, Tesla has painstakingly understood the intricacies of combining traditional automotive technology with modern software and worked to automate production. With the help of advanced robots, Tesla has finally solved the mass production problem of producing a staggering 6000 electric vehicles per week, of course, remains to be seen.
Now, as Tesla struggles with a combination of cash crunch, bad press and Elon Musk’s offhanded tweets, the company is at another crossroads. To realize its potential, Tesla needs a strategic partner. Continuing as a public company may no longer matter to it.
Musk mentioned in the tweet that Saudi Arabia is interested in investing in Tesla, but the best acquirer is not Saudi Arabia, because the interests of this country itself conflict with Tesla’s interests. Electric cars and solar technology will cause oil prices to plummet and destroy the value of Saudi oil reserves, so Saudi Arabia will lose a lot in oil if its investment in Tesla pays off. However, tech companies share Musk’s goals and ambitions, particularly Apple and Google. They have strong capital, technology and marketing advantages, which can greatly enhance Tesla’s product services. In addition, Apple also has strong manufacturing capabilities and distribution channels.
Tesla will provide Apple with an entirely new technology platform on which to build new product lines. In order to maintain its trillion-dollar market cap, Apple needs Tesla’s technology platform; after the release of the iPhone in 2007, Apple has effectively not launched a product that changed the world. With its cars, energy storage and solar technologies, Apple desperately needs to break new ground, and Tesla can provide just that.
Apple’s existing products will also benefit from the advanced technology used in electric vehicles, such as batteries and on-board electronics. And Apple will get the second-best self-driving software in the industry.
In turn, Tesla could also upgrade its vehicles to iCars by integrating iPads, Apple TV, iTunes and the App Store into its electric vehicles. iCars can take advantage of macOS to replace their clunky operating system. I’m sure all Tesla electric car owners — like me — would like to be able to download apps and music onto a more user-friendly platform than Tesla’s existing console.
Apple would bring world-class manufacturing and inventory management processes to Tesla and create new cars of different sizes and shapes at lower prices. This will give it a second chance to regain the huge markets it has lost, especially India and China.
Google’s interests also dovetailed with Tesla’s. Google doesn’t have Apple’s manufacturing capabilities, but its maps and self-driving software outshine anything else. Tesla’s mapping software is substandard and its Autopilot software needs an upgrade. Waymo, Google’s self-driving car development company, could focus on the software and let Google’s Tesla unit handle the hardware.
Given that Morgan Stanley just put $175 billion into Waymo’s stock, Tesla’s $70 billion price tag isn’t a big deal for Google, and the results of such a merger are formidable.
Would Musk accept such an offer? He reportedly turned down an offer from Google in 2013, scoffed at the idea of Apple buying Tesla in an email to me in April 2014, and dismissed the possibility on an earnings call last year. Yet, as Musk has admitted, he is on the verge of personal limit, close to burnout; after witnessing the disastrous impact of his tweets about securing funding, and as Saudi Arabia invests in rival startups, things May have started to change.
I bet Musk would come up with a proposal that would solve his financial problems while giving him autonomy. With funding woes and quarterly inventory pressures gone, the world’s greatest innovator is free to pioneer new world-changing ideas that transform entire industries, including automotive, energy and space. It’s a win-win for Tesla — and for humans too.