Tesla could go to Apple for take-private deal, says investor – does it make sense?

There have been rumors of Tesla and Apple partnering up for years, but now they are intensifying in light of Elon Musk pushing to take Tesla private.

Ross Gerber activist Tesla investor is even now calling for Apple to take a stake in Tesla as part of the ongoing discussions for a take-private deal.

But does it make sense?

Gerber went on CNBC yesterday to argue that Apple should get involved because he sees Tesla’s current issues as being operational and that’s one of the Cupertino company’s biggest strengths.

The investor said:

“If you look at actually what Elon’s problems are every day, they are operational, which is why Tim Cook was hired by Steve Jobs back in the day. Cook is perfect for this role. In the past Apple and Tesla probably wouldn’t have gotten along because Musk didn’t need Apple, but it is clear he needs help [now].”

As for Apple, Gerber argues that the company is in need of technological innovation, which he thinks Tesla could bring to the table.

He added:

“My biggest fear with Apple is that they have fallen so far behind in the innovation curve, I don’t see where they will be five years from now. I don’t think phones are going to be the primary device in a decade,”

Tesla CEO Elon Musk believes that Saudi Arabia’s sovereign wealth fund could single-handily provide the money for a take-private deal, but he did say that he would prefer for Tesla to maintain a diverse investor base in a take-private deal.

Therefore, he has been looking for other investors to get involved in the deal.

Every company and fund with deep pockets under the sun, like Apple, have been rumored or suggested as potential investors.

Electrek’s Take

I put the chances of this happening as low as it gets for a multitude of reasons.

Forget the poaching war between the two companies and the not-so-good words Musk had for Apple in the past and vice-versa.

Gerber suggests that the two companies actually need each other. I would respectfully disagree.

First off, we have never gained a perfect understanding of Apple’s intentions when it comes to the auto industry. There have been tons of different reports.

One thing is clear, Apple is very much developing a self-driving technology, but do they want to only develop a self-driving system to work with other vehicles, à la Waymo, or do they want to develop their own cars?

That’s what is unclear.

If they want to develop their own car then that’s because they don’t like what they are seeing on the market and think they can do better. Unclear why they would need Tesla in this case.

But if they want to build self-driving systems and incorporate into existing vehicles, like Waymo with Chrysler and Jaguar, then it could make sense to partner up with existing automakers, like Tesla.

My two problems with this scenario are that there are not many precedents, especially in recent years, for Apple to build systems to be incorporated in hardware from other companies. Apple’s whole shtick is a seamless integration of hardware and software.

Secondly, Tesla is convinced that its own approach to self-driving is the best one, so I doubt they would partner with anyone else.

Therefore, I think the first scenario is more likely.

As for Tesla needing Apple, I don’t think Tesla is actively looking for “partners” that would help them in any other way than financial support for the take-private deal, unlike what Gerber is suggesting.

While there’s no doubt that Apple could help Tesla in other ways, including operationally, I don’t see that being on the table at all. I really can’t see Tim Cook splitting his time between running Apple and helping Tesla’s operational problems.

Tesla is looking for financial backers willing to buy shares at $420 to give investors an exit option in a take-private deal. That’s it.

Could Apple help there? Sure, but I don’t see them becoming a partner with Tesla in the near future.

I could be wrong. What do you think? Let us know in the comment section below.