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Elon Musk: An Apple-Tesla Merger is "Very Unlikely"

A deal might make sense on paper. But...

One of the big rumors floating this week was that Apple has shown an interest in possibly purchasing Tesla Motors. That bit of speculation came courtesy of the San Francisco Chronicle, which reported that Tesla CEO Elon Musk had met with Apple's head of mergers, Adrian Perica, in Cupertino last spring.

On paper, Tesla and Apple fit together perfectly, like a magnetic charger snapping into a MacBook. Consider the similarities: Apple produces forward-looking and polished electronics; Tesla produces forward-looking polished electronic cars. Both companies command high premiums on their products. And Tesla employs at least 10 former Apple staffers, including Doug Field, former VP of Mac hardware and engineering.

Steve Jobs was even said to have once dreamed of building an iCar, and patents show Apple has been interested in the automotive sector for years.

You can see why some watchers—including Wall Street—were excited by the prospect. One would have to imagine that a futuristic, battery-powered car would qualify as a breakthrough product.

But on Wednesday we learned an Apple-Tesla merger probably isn't in the tea leaves, at least according to Musk. In a short TV interview with Bloomberg West's Betty Liu, the billionaire admitted to meeting with Apple, but declined to spell out what those talks entailed. "We had conversations with Apple," he said, before admitting that selling Tesla to anyone was "very unlikely." Musk told Liu that Tesla's main concern was developing a mass market electric vehicle, and that "any acquisition scenario" would inevitably be a distraction.

For what it's worth, Tesla, which placed 29th on our list of the world's Most Innovative Companies, ended last year on a high note: Sales of its Model S were 20% higher than expected.

Let's remember, too, that Apple isn't really known for big, splashy multi-billion dollar acquisitions, unlike Google, or more recently, Facebook. One can only imagine what having a big personality like Musk inside the Apple mothership would be like for Tim Cook and Co.

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  • Chien-Yu Lin

    People do not understand that manufacturing has a culture and a set of business requirements all its own. Apple understands this: if it didn't, they - and not Foxconn - would be making devices.

    Would not be surpassed if Tesla is more like Detroit than Silicon Valley: Tesla just has a different starting point and less "baggage" of assumptions and contracts.

    "Focus on Innovation + Price Premium + Common Personnel" does not equal "Acquisition".

  • Brian Wark

    I own Apple shares and think it would be the greatest thing the company could do with all the money. Since Tesla's future and the future of electric cars need a huge investment. If Facebook can justify 19 billion for an app. Than Apple can justify buying a truly great car company. It would be interesting to see how much CO2 and gasoline cars with better milage just to compete with Tesla.