Apple and Tesla Motors Inc. (Nasdaq: TSLA) Might Have a Secret Plan

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It now appears that rumors Apple Inc. (Nasdaq: AAPL) had an acquisitive eye on Tesla Motors Inc. (Nasdaq: TSLA) were just that – rumors.

But the two companies have been talking, and almost surely about the planned Tesla Gigafactory, an enormous rechargeable battery production plant projected to open in 2017 and cost at least $5 billion.

It makes total sense. Thanks to its sales of millions of mobile devices like iPads, iPhones, and laptops, Apple uses twice as much battery capacity as Tesla.

Always on the lookout for new and cheaper suppliers, no doubt Apple sees Tesla as a very attractive partner.

Title: electric car nasdaq tsla - Description: electric car nasdaq tsla

Tesla Motors says the Gigafactory will be able to double 2013's global production of lithium-ion batteries by 2020, and in doing so dramatically reduce costs through economies of scale.

What's more, both companies are based in the United States. In fact, they're neighbors; Apple calls Cupertino, Calif., home and Tesla nearby Palo Alto, Calif.

That opens the door not just to a strong supplier-customer relationship, but also to much bigger possibilities.

All the pieces are there for an historic collaboration that could shake up both the mobile device and the electric vehicle industries.

Here's what Apple and Tesla can do for each other – and how that could lead to major increases in revenue…

Apple and Tesla Motors Inc. (Nasdaq: TSLA): A Perfect Pair

First, let's look at what Apple brings to the table. Mainly, it's money – lots of money.

Apple needs to find productive ways to use its massive $159 billion cash hoard, and Tesla, which has less than $845 million in cash and $607 million in debt, wants to build a Gigafactory that will cost about $5 billion, although the final cost could be much higher.

Tesla said it plans to spend $2 billion on the Gigafactory, while enlisting partners to help cover the rest of the cost. One known partner is Panasonic Corporation (OTC ADR: PCRFY), which is chipping in $1 billion.

Apple could contribute that and more, particularly if costs start to escalate well beyond estimates.

But the money and the supplier relationship are practical considerations. The true potential in this relationship lies in a shared challenge.

Join the conversation. Click here to jump to comments…

  1. mds | March 4, 2014

    All they need is LEXG to supply the Lithium from nearby Canada and the puzzle is complete.

  2. Thomas Earle Moore | March 4, 2014

    Interesting comparison of total capacity. Seems like a no brainer!

  3. Mike | March 4, 2014

    Need to buy some Tesla stock for sure.

  4. drivin98 | March 4, 2014

    Of course Apple and Tesla are secretly in bed with each other. That's why Apple's newly introduced CarPlay debuted in a Tesla.

    Oh, wait. It didn't.

  5. mike | March 5, 2014

    Logical partnership. Tesla built a factory, Apple provides financing. Apple buys batteries at discounted rate and dump its suppliers.

  6. JFG | March 24, 2014

    Most EVs are cars to which the manufacturer has added batteries and a computer. The Tesla is a computer to which the manufacturer has added a motor and wheels. Tesla and Apple have a lot more in common than Silicon Valley addresses and huge battery needs.

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