Would You Drive an iCar? Hubbub Among Analysts Over Apple-Tesla Meeting

By Tara MacIsaac, Epoch Times
February 18, 2014 Updated: February 18, 2014

Analysts have been discussing the prospect—however remote—of a merger between Apple and Tesla since the San Francisco Chronicle reported on Sunday about an interesting meeting.

Apple’s chief of mergers and acquisitions, Adrian Perica, met with Tesla CEO Elon Musk last year. There is no indication that a deal is actually in the works for Apple to buy Tesla, and Apple does not have a history of making large acquisitions, but the meeting has spurred speculation nonetheless.

In 2013, Berenberg financial analyst Adnaan Ahmad wrote a letter to Apple’s CEO Tim Cook and Apple’s Board Chairman Art Levinson, suggesting Apple buy Tesla. Here’s a summary of some of Ahmad’s arguments in favor of the merger:

1. The time is ripe for infusing the auto industry with Apple’s technological innovation: “The auto industry is going through a technological discontinuity in its shift to hybrid and electric vehicles.”

2. The total available market (TAM) of the auto industry is $1.6 trillion and hybrid and electric vehicles are expected to increase to 10 percent of this TAM by 2025.

3. “From a U.S. national policy perspective, Apple could re-ignite the U.S. auto industry and give it a competitive edge versus the current Asian and European leaders, similar to what you have done in the smartphone and wireless space where the [United States] is now at the forefront of technological leadership after having been a laggard for over two decades.”

4. Elon Musk, Tesla’s CEO, could be a “new iconic partner to lead Apple’s innovation drive.”

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