Apple to Partner With Tesla for New Battery 'Giga Factory'?

Apple reportedly met with Tesla CEO Elon Musk last spring to discuss partnering with or acquiring the company, according to a SFGate report.

Since hiring Adrian Perica from Goldman Sachs in 2009 Apple has been increasing its acquisitions. Last quarter it spent $525 million on acquisitions, double the amount it spent for the entire prior year.

In October 2013, Adnaan Ahmad, a German investment banking analyst, penned an open letter to Apple CEO Tim Cook and director Al Gore urging them to acquire Tesla.


"I know this is radical and potentially 'transformative' but this would radically alter Apple's growth profile," Ahmad wrote. "In Elon Musk, you could strike up a partnership and obtain a new iconic partner to lead Apple's innovation drive."

Notably, SFGate's source say at the time of the letter, Apple had already met with Musk.

While a megadeal has yet to emerge (for all of its cash, Apple still plays hardball on valuation), such a high-level meeting between the two Silicon Valley giants involving their top dealmakers suggests Apple was very much interested in buying the electric car pioneer.

While an acquisition of Telsa may have been considered, a partnership seems much more likely. One idea is that Telsa could put Apple's technology into its vehicles. ie. iOS in the Car. Another more interesting possibility is that Apple is a partner for Telsa's new battery 'giga factory'.


A few months ago Telsa said that its solution to battery shortages was to build its own factory.

“This will be a giant facility. We are talking about something that is comparable to all of the lithium-ion battery production in the world — in one factory,” Musk said. “It’s big.”

He also indicated that the factory would be built in partnership with other companies.

"I’m very excited about our plans for… the the biggest battery plant in the world by far and we’ll do it in partnership with the with some other companies and that’s the shaping up really well…we’ll be talking about it next month… were making the final selection I among as to which state it’ll be an I in the next a month or so…"

Finally, the factory description does sound 'Apple-like'.

"This is going to be a very green factory. There's going to be a lot of solar power. It's going to have essentially zero emissions and there are no toxic elements that are going to come out ... and we will build recycling capability right into the factory."

While far from confirmed, a deal with Telsa could be beneficial to Apple. What do you think? Can you see Apple working with Telsa or partnering on a production facility? It recently partnered with GT Advanced for sapphire production.

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