Apple is joining the self-driving car race, but may need the help of a certain Elon Musk-owned marquee EV brand to do it.
As NextMobility recently reported, Apple CEO Tim Cook announced that the tech behemoth is working on the “mother” of all AI for autonomous vehicles. While Apple has technological know-how, it is behind competitors Uber, Tesla and Waymo in terms of having access to real-world driving data.
In a note sent out to clients, Adam Jonas, an analyst at financial research firm Morgan Stanley, recommended that Apple explore a partnership or an acquisition of Tesla, according to Markets Insider.
Tesla has accumulated billions of miles of driving data through its fleet learning program, and it’s this data that could fast-track Apple’s efforts into autonomous vehicles. Jonas estimates that if Apple were to go alone on this, the company would spend around $16 billion in research and development costs in the next four years, four times more than the $4 billion he expects Tesla will spend during the same timeframe.
“Each 1% share of the miles market at $1/mile (including the transport service and any related/ancillary revenue) is worth $200bn in revenue and potentially tens of billions of pretax profit,” Jonas wrote to clients.
Morgan Stanley’s analyst previously asked Musk if he could see an Apple-Tesla marriage in the future, to which Musk responded :
“I don’t think they want to have that conversation — there’s not been any indication that they do,” Musk said on the company’s earnings call. “But obviously, Apple’s company makes some great product … I use their phone and their laptop, it’s cool. I don’t know what they’re going to do on the car front.”
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The only thing Apple could offer Tesla for the self driving data is outright acquisition, which is impossible because Musk still controls the company.
Autonomous is a big part of Tesla's strategy moving forward and it is ridiculous to think they would sell or hand it over. It's like these people don't even know Musk.
I'm really quite perplexed at how long it's taking people to realise that Tesla is about to acquire a near-monopoly on the EV Market, how profitable that will be and the ramifications of the autonomous driving part of Tesla's plan.
The economics of car ownership are about to fundamentally change. Nothing will be the same after this.
One thing that Apple could offer is a MOUNTAIN of cash. They could invest 10 or 20 billion in Tesla that would allow Tesla to ramp up factories and product design at a much higher rate.
Have you seen Tesla's stock price?
Tesla has no to sell equity to a potential competitor in autonomous vehicles. They can just tap normal capital markets.
I really don't think money is what is stifling Tesla growth at the moment, but if it were it doesn't need an Apple handout. It wouldn't make any strategic sense.
But I'm a software guy, not a business guy, so if Elon thinks he can succeed better without them then I say go for it. I'm in the stock for the long term play.
Musk is just gunna hand over all of his hard earned precious data? Hmm idk about that.
I can just imagine a phone-call about this idea …
Tim Cook > “I'll trade you a shiny new iPad for all your self driving data”
Elon Musk > “You might want to pad that offer a little more...?”
Every Tesla could come with a free unlimited subscription to Apple Music. That'd be pretty sweet, but I'd much rather Spotify.
Apple could become an official retailer for Tesla? Or maybe Apple could give Tesla some legal help in allowing sales in MI, UT, TX, and CT?
Apple could help dramatically build out the supercharger network?
Apple could help Tesla build a bunch of Gigafactories?
I'm feeling like Apple Music is most likely. Musk has been tweeting a lot about how Tesla is going to make some major music announcements soon.
