Apple Could Potentially Take Over Tesla

Would Tesla be better off under Apple ownership?

Rumors of an Apple buyout of the California automotive startup have circulated for years, but conditions for a takeover have never looked as good as they do right now. In fact, Citigroup has listed Tesla as a prime target for Apple to purchase with its massive cash reserve.

Apple wants to venture into the car business and has likely spent billions on research and development of a new type of automobile, but the project has yet to result in any concrete news or announcements from the company. MacWorld put together a great article listing the evidence of Apple’s car ambitions, but no one really knows if the project is still in motion or if Apple has scaled back its plans.

Buying Tesla could give Apple entry into the automotive market while satisfying pressure from shareholders to reduce its massive stockpile of cash.

But there’s another variable at play here, too. Apple keeps the majority of its $250 billion in cash reserves overseas. Under previous administrations, the company would face a hefty 35 percent tax when bringing that money back into the U.S. Last month, President Trump reduced the tax rate to 10 percent, which may make it much more appealing to Apple to finally put the money to good use.

Let’s assume for a minute that Apple does decide to spend its money to buy Tesla. What would happen to the automaker? So much of Tesla’s personality is a direct reflection of its CEO, Elon Musk. He’s a modern day Steve Jobs and is the face the automaker. Without him, Tesla may become just another cog in a corporate powerhouse and lose its edgy advantage.

You have to have a little crazy to start an automotive company and try to change the way cars are built and sold. Elon Musk has just enough to keep Tesla interesting, compelling, and relevant to people’s lives. Under Apple ownership, however, it’s possible Tesla could become much more normal… and that could be its downfall.

UBS Bank sees the possibility of a Tesla acquisition as well, but downplays the possibility. The bank “thinks that if Apple ever does pursue a mega-merger, it will be in a completely unexpected field.”

Would you be more likely to buy a Tesla if Apple owned the automaker?

-tgriffith

Find Certified Pre-Owned Cars and Used Cars in your area at CarGurus.

1 Comment

  1. Apple could do some really cool stuff with Tesla, they need something to stay relevant as the iPhone buzz isn’t what is use to be.

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