Tim Cook, who succeeded founder Steve Jobs as CEO at Apple, has done a fabulous job of building off the base he inherited. But his safe pair of hands has come at a cost, as we read below in this excellent article from our partners at the Wall Street Journal. When Elon Musk’s electric carmaker was in deep trouble two years ago, he tried to sell Tesla to Cook for $60bn, equivalent to around one third of Apple’s cash holding. Today a similar deal would cost three times what Apple has in the bank. It’s an academic exercise, though, as Cook refused to take Musk’s call, presumably defaulting to Apple’s long-standing approach of growing organically rather than by acquisition. Were the late Jobs at the helm, however, he’d surely have realised there are exceptions to every rule and given his entrepreneurial instincts, would have viewed the Tesla opportunity differently. Especially as Apple yesterday announced plans to start selling its own electric cars in 2024. – Alec Hogg
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Elon Musk says he once approached Apple CEO about buying Tesla
Apple’s Tim Cook didn’t take the meeting, the electric-vehicle maker’s chief says in a tweet.
“During the darkest days of the Model 3 program, I reached out to Tim Cook to discuss the possibility of Apple acquiring Tesla (for 1/10 of our current value),” Mr. Musk said in a tweet Tuesday. But the Apple CEO, he said, “refused to take the meeting.”
Mr. Musk revealed the latest detail as he questioned the seriousness of Apple’s plans to bring out an electric car of its own, amid a new report the company is pushing for 2024 production.
On Twitter, Mr. Musk called the report “strange, if true.”
Tesla has built a brand for itself as a Silicon Valley auto maker offering high-tech cars with promises of fully self-driving technology on the near horizon. The specter of a driverless, electric car made by tech giant Apple could prove the kind of fierce competition that traditional auto makers, such as General Motors Co. and Volkswagen AG, have yet to muster.
In 2014, Apple began working on its own car project, dubbed Project Titan, details of which emerged in early 2015. The project has gone in fits and starts.
Apple has been making plans to begin production of an electric car as soon as 2024, a person familiar with the effort said. Reuters earlier reported the new timeline.
The Apple project is being headed up by Doug Field, a longtime Apple executive who left the company for about five years to work at Tesla, where he oversaw the development of the Model 3. He left in 2018 and returned to Apple, where he began work on the car project.
Apple declined to comment.
Mr. Musk on Tuesday didn’t specify exactly when he approached Mr. Cook.
Launched in 2017, the Model 3 proved harder to build than Mr. Musk expected. Costly delays mounted before Tesla eventually worked through production and delivery snags in 2018, when it posted profitable quarters in the second half of that year. It continued to struggle the early part of the following year, however.
In August 2018, Mr. Musk shocked investors with the idea of taking the electric-car maker private in what would have been the biggest buyout in history. Mr. Musk at the time wrote on Twitter: “Am considering taking Tesla private at $420. Funding secured.” The deal didn’t happen, and the tweet spurred a Securities and Exchange Commission probe and legal battles with the regulator.
As Mr. Musk tried to make a deal work to take Tesla private, his advisers sought funding from several places, including Volkswagen. He eventually scuttled his effort.
By the third quarter of 2019, Tesla had turned the corner and kicked off a string of quarterly profits, exciting investors who have sent the company’s shares soaring and made the company the most valuable auto maker in the world with a value of more than $600 billion. It was added to the S&P 500 index, a key benchmark, on Monday.
Excitement around the company has allowed Tesla to raise billions of dollars for what Mr. Musk has described as his war chest.
Mr. Musk didn’t respond to questions about his latest tweet.
The Model 3 wasn’t Tesla’s first troubled car introduction—all vehicles up to that point had been painful. The company’s first vehicle, the Roadster sports car, almost led to the company’s collapse in 2008 and the Model S large sedan in 2012 was also troublesome. During that period, Mr. Musk turned to Google about a potential deal, people familiar with the situation have said.
When sales of the Model S kicked in during the first quarter of 2013, Mr. Musk was able to post the company’s first quarterly profit and he quickly raised more money amid the excitement about the company’s future.
Mr. Musk’s success with Tesla has spurred investor enthusiasm in electric cars and other advanced driving technologies. It is also leading to more competition for Tesla. Traditional car-making rivals are ramping up their electric vehicle efforts. And rivals working on self-driving car technology, such as Waymo LLC, a unit of Google’s parent Alphabet Inc., also are securing funds to ramp up their activities. Amazon.com Inc. in June said it was buying autonomous car-developer Zoox.
Talk of an Apple-Tesla tie-up has often circulated around Silicon Valley. During a 2015 shareholder meeting, Mr. Cook sidestepped shareholders pushing for a deal. “Quite frankly, I’d like to see you guys buy Tesla,” one investor told Mr. Cook during the meeting—a sentiment met with laughter and applause.
Apple typically has eschewed big acquisitions. It bought Beats Electronics LLC for $3 billion in 2014, though has never done a transaction near the scale of what Tesla would have cost.
The car-making business is notorious for its high costs. Apple, though, has ample financial muscle. The company had around $192 billion in cash and marketable securities on hand at the end of its latest financial year that closed in September.
Since his earliest days as CEO, Mr. Musk has turned to Apple for key hires and inspiration, from store designs to a large, flat-screen, touch panel in the Model S.
As Apple became more interested in cars, a war for talent ensued. Mr. Musk complained to Bloomberg Businessweek in a 2015 article that Apple was trying to poach his engineers with offers of $250,000 signing bonuses and 60% salary increases. He later lamented to German newspaper Handelsblatt that Apple hired those who couldn’t handle working at Tesla. “We always jokingly call Apple the ‘Tesla Graveyard,’ ” he was quoted saying in 2015.
Still, it has been clear that Apple has been in Mr. Musk’s sights. That year, he also told investors that he saw a path for Tesla by 2025 to be as valuable as Apple was at the time, which then was $700 billion.
Write to Tim Higgins at [email protected]
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Appeared in the December 23, 2020, print edition as ‘Musk Says He Sought Tesla Sale to Apple.’
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