Munster: Why Apple will never buy Tesla

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Gene Munster can argue it round or flat but the result is always the same.


From “Apple + Tesla Is a Fairy Tale with a Twist” posted Monday to Loup Ventures subscribers:

Our bet is that Tesla is successful and reaches sustained profitability in a year.

The twist: If we’re wrong, and Tesla fails to reach profitability in the next year, Apple gains the upper hand and becomes the most likely investor or buyer. Both companies share a passion for hardware design, software, AI. Plus, Apple’s balance sheet makes the combination viable. Google is the next most likely acquirer. We don’t see a traditional automotive company as a potential acquirer, given they lack the cash needed to purchase Tesla even at a distressed valuation…

Now, why an equity investment won’t happen: Apple and Tesla are single product visionaries. Single product visionaries create world-class consumer products. Steve Jobs with Mac and iPhone, and Musk (even with his issues) with Tesla. These visionaries are able to build cultures that create great products. If you try to merge two unique cultures, you usually end up with mediocrity…

And why an outright sale won’t happen: Elon Musk owns 21% of Tesla, so it would require 83% of the non-Musk shares to vote for the sale, which would be unlikely given shareholder and insider support for Musk. It’s fun to talk about Apple buying Tesla, but we don’t think Tesla is for sale.

My take: I’ve read dozens of Apple acquisition fairy tales, and none of them ever came true. Besides, why would Apple buy the whole tree when it can cherry pick the talent?