Why Tesla should be very, very afraid of Apple

Following tweets from Tesla founder Elon Musk on Tuesday saying that he’d reached out to Apple CEO Tim Cook in 2018, “during the darkest days of the Model 3 program,” to discuss the possibility of Apple acquiring Tesla for a tenth of its current value which followed, and were likely prompted by, a Reuters report on Monday that Apple is moving forward with self-driving car technology and is targeting 2024 to start production of a passenger vehicle that could include its own breakthrough battery technology, Bloomberg‘s Tim Culpan writes that Apple is Tesla’s “perfect nemesis.”

vehicle under wraps

Tim Culpan for Bloomberg:

It was kind of inevitable that Tesla Inc.’s biggest challenger wouldn’t be a car company. Apple Inc. makes for the perfect nemesis and could teach its California cousin a thing or two about reliability and delivery…

Already, one thing Cook can do better than Musk is deliver a high-quality and consistent product on time. What’s holding Tesla back from growing into its $616 billion market value isn’t demand for its EVs, but inability to manufacture them.

Musk recently said that Tesla has “the high-class problem of demand being quite a bit higher than production this quarter.” That could be taken as a boast, but shouldn’t be. In effect, Musk is admitting that he’s leaving money on the table. The clear implication: Tesla might be good at designing but struggles at making EVs.

Musk fancies himself as the man who upended the automotive industry with an electric-only vehicle and direct-sales business model. Investors seem to think that warrants making Tesla the world’s ninth most-valuable company. But maybe the next true innovation in autos will pass him by as he clings to the fantasy that a car’s brand should also be its manufacturer.

Tim Cook looks ready to prove him wrong. This fight will be won on the factory floor.

MacDailyNews Take: Obviously, Musk’s tweets on Tuesday reveal more than a bit of apprehensiveness, which is well-founded, given that Apple generates Tesla’s annual free cash flow every 10 days.

The way the “Apple Car” will integrate into Apple’s ecosystem, along with Apple’s reported breakthrough battery technology and other innovative Apple-only features (Apple Glasses AR tech built into windshields, 5G iCloud connectivity, included services like Apple Music, etc.), will be things that no other vehicle will be able to match – and Musk knows it.

21 Comments

  1. This assumes that Apple will actually deliver a car, and one that can actually be affordable by those other than those that can afford a Tesla.. I still think ultimately, we are going to see add on systems, to existing, no car…

  2. Let’s be honest here, Apple will be a major player if it decides to enter the field because Teslas are made in the US, and Apple car would be made wherever unions are outlawed and labor pay is at survival rates.
    Hugh Massengill, Eugene Oregon

  3. Time for Elan to roll a big one and enjoy it on a popular podcast. At the same time, provide some type of stock price warning, or expectation of gain for some weed-induced and or, fickle reason.

  4. An AppleCar? Give me a break. Apple sells wheels for the Mac Pro and everyone says the $400 price is a rip-off, so I’m sure an AppleCar will cost around $100,000 and certainly won’t be able to compete with Tesla’s $50,000 vehicles. I honestly can’t see Apple selling entire cars to the masses as automobiles don’t offer a highly profitable business of the sort Apple enjoys.

    “Obviously, Musk’s tweets on Tuesday reveal more than a bit of apprehensiveness, which is well-founded, given that Apple generates Tesla’s annual free cash flow every 10 days.”

    More obviously, investors don’t give a damn about Apple’s cash flow considering Apple’s P/E of 40 to Tesla’s P/E of 1200. Investors appear to love Tesla in ways I could never imagine.

    1. The MO of making your first car very expensive, is it tempers demand and gives valuable R&D in the process.
      But I think by 2025, the likes of VW, Ford etc will be rolling out EV’s for the masses.
      Already the EU is seriously considering bringing forward their EV plans, the UK has committed to 2030.
      Right now Citroen has a $6k EV that is perfect for city driving.

  5. An Apple car sounds intriguing but I think the standard Apple logo on the front would look weird.
    Given Apple’s tendency to under-spec the base model, I wonder if that will only come with 1 wheel as standard and you will have to upgrade for the other three at twice the cost 🙂

  6. So Apple has not filed any patent on battery technology, but (a group of nameless “insiders” anonymously unofficially) claims to have a breakthrough technology? Why not use that breakthrough on the iPhone12? The 12th battery is the worst crap ever found on an iPhone not a breakthrough at all.

    If, like you wrote this fight would be won on the battery floor, one should know that Apple die not manufacture anything on the factory floor since the Apple IIe, but did catalog engenering for 30 or so years now only. But Foxconn did not file any battery patents as well…

  7. Just a monthly recharge and 10-minute top-up might get me very interested in an Apple – or any – EV to replace my ultra-economical Focus diesel, which has a range of around 800 miles.
    But the important question is, can Apple out-do my Tesla Cybertruck on order`?

  8. Musk is Jobs/Wozniak 2.0. Sleepy salesman Cook will lose this fight against a visionary founder/CEO who puts the product first just like the grandseigneur used to. Cook is a formidable administrator of success but he lacks focus and it seems he‘d rather be a woke bullshitter dining with famous good persons etc instead of being a truly great CEO.

    Read my lips: There won‘t be a competitive Apple car unless Tesla buys Apple one day. 😉

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