The Intriguing Parallels Of Tesla And Apple

6 months ago by EVANNEX 17

Tesla

Tesla Model S

THE APPLE AND TESLA CONUNDRUM

Whenever Wall Street talks about Tesla invariably some comparison to Apple seems to arise.

Morgan Stanley’s Adam Jonas questioned Tesla’s competitive edge recently and Barron’s ran the headline, “What if Apple becomes Tesla before Tesla becomes Apple?”

Jonas argues, “The bull case on Tesla is that it can become the next Amazon or Apple. We see such firms as competitors ultimately.” Jonas has run hot and cold on the electric automaker for years. But, is he onto something?

Auto Evolution provides context: “No matter how much Tesla has grown over the past four years (its value has increased tenfold, if you need to ask), it’s still only a sardine compared to the shark that is Apple. The Cupertino company now has a cash reserve of over a quarter of a trillion dollars. That’s $256.8 billion, to be exact, ready to be spent at any time.”

That means Apple could buy the Silicon Valley electric automaker three times over in cash.

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman.

Tesla

Spy shot of a silver Model 3 release candidate spotted yesterday in front of some Tesla Roadsters

In fact, Morgan Stanley’s Adam Jonas outright asked CEO Elon Musk (during TSLA’s Q1 earnings call) about the possibility of his auto company being acquired by Apple.

Musk was coy in his response: “Yeah, I don’t think they want to have that conversation. At least I’ve not heard any indication that they do. Obviously Apple continues to make some great products and, yeah, I mean, I use their phone and their laptop, it’s cool.”

Nevertheless, earlier this month, Citigroup actually cited the Palo Alto automaker as one of Apple’s seven possible acquisition targets. Hmmm.

Tesla

Apple’s seven possible acquisition targets (Image: CNBC via Citi Research)

Regardless of whether an acquisition is in the works (we doubt it), the comparisons between the companies have been running rampant on Wall Street. Last week, billionaire venture capitalist Chamath Palihapitiya spoke at the Sohn Conference and made some waves when he noted that Tesla could be worth “hundreds of billions” of dollars in the next decade. Why? Palihapitiya explained:

“a historical analog… [with] another company very similar to Tesla. I wanted to explain to you our view of Tesla in context to another company you already know — Apple.”

Above: A discussion of Palihapitiya’s views on how Tesla could be the next Apple (Source: Yahoo Finance)

Drawing some parallels, Palihapitiya said that Apple’s “iPhone was an unbelievable feat of technology, of engineering. What this product did was capture consumer innovation and it created a tailwind of demand. Is Tesla running the same playbook? What we do know is that the company’s early traction is tracking close to Apple. That third iteration [of the iPhone] is what broke down the walls for consumer demand. The S and the X have set the stage for Model 3.”

And Palihapitiya has an impressive track record of picking breakout companies — last year he pitched Amazon stock at the Sohn Conference which is up about 40% during the last 12 months.

Tesla

Many see parallels in the visionary leadership styles of Steve Jobs and Elon Musk (Image: flickr via Ritz Carltn)

In addition, the research team at Loup Ventures also discussed intriguing parallels between Tesla and Apple. But, the Loup Ventures team takes a more measured approach explaining that: “Tesla is not a car company,” but rather, “It’s an operating system for sustainable energy that combines a powerful brand, a visionary founder, integrated hardware and software, and a halo effect all with the purpose of transforming a combination of large markets.” That said, the analysts conclude that ultimately, “TSLA might be the next AAPL, but Tesla will forge its own path and the world will be better for it.”

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers. Our thanks go out to EVANNEX, Check out the site here.

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17 responses to "The Intriguing Parallels Of Tesla And Apple"

  1. Dan says:

    I don’t see the parallels. If Apple enters the car business, Tesla would have played the role of Blackberry. Apple is quite conservative and never invents a market – it usually only enters when the market has already been defined by an early market leader, whether it is IBM/MSFT with PCs, Rio for MP3 players, or Blackberry for smartphones.

    1. David Murray says:

      I will only partially agree with that. While it’s true that Apple has never really “invinted” much of anything, they have taken ideas that other people couldn’t seem to get right, and made them work. And at a price people could afford.

      Apple II – A color computer that people could afford.
      Macintosh – A graphical user interface that people could afford.
      iPod (combined with iTunes) made it possible for regular people to buy digital music.
      iPhone – Took an idea (like the blackberry) and made it into a much better product and basically invented the market for apps.
      iPad – First of its kind, a real tablet computer that didn’t run Windows and had a user-interface designed JUST for multi-touch.

      That being said.. I think the main advantage to Apple buying Tesla would be it’s cash on hand. They could accelerate the roll out of charging stations and manufacturing and design of new vehicles. RIght now I think Tesla has a lead on other manufacturers. But once GM and Ford make up their mind that they are ready to really compete, Tesla’s lead may not help them that much.

      1. Jason says:

        Actually, Apple pretty much invented the Personal Digital Assistant (PDA) with their Newton (awesome device, pity the day mine failed to start), which paved the way for the current mobile phones. Apple lost the PDA market to Palm, but ultimately won it back with the iPhone.

        I wish they had of continued with the Newton hand writing system, it was very intuitive and functional, even if the recognition was not that great at the time.

        It will be a sad day of Apple bought Tesla. Tesla is very open and let’s their drivers setup the way that suits them, Apple is very closed and dumbs down their products for the masses.

    2. Stx says:

      I don’t think Apple would be able to do what Tesla is doing.

  2. Vexar says:

    This is total BS and I’m sure that secretly, Elon is a little offended here. This doesn’t come up a lot, but Elon grew up with a Commodore Amiga (given where he grew up, this was more than obvious) and has never truly liked Apple because back before OSX came out, far too many Mac users were a bunch of conceited jerks. To this day, you can still hear his aversion to Apple when it comes to employee poaching. Calls Apple the graveyard where people who can’t hack it at TMM end up.

    1. David Murray says:

      I doubt Elon’s Amiga upbringing has any effect on his current feelings about Apple. I was also a C64 and Amiga user and yet here I am typing this on a Mac. The Apple of today bares little to no resemblance to the Apple of 20 or 30 years ago. Heck even the logo and the name have changed.

      1. Vexar says:

        I did say before OSX for a reason! Elon is a competitive fellow. Given a choice between Windoze and OSX, I’d choose OSX any day. Apple makes great hardware. What I prefer to do is run Linux on a Mac. Keep OSX in an emulator.
        However, I do rest my case on the fact that Elon built his car on Android, not OSX!

        1. SparkEV says:

          “Keep OSX in an emulator”

          Is that even legal? I thought running OSX on anything other than Apple hardware is not legal.

          As for “far too many Mac users were a bunch of conceited jerks”, some people think that about EV drivers, especially Tesla drivers as they are seen as “rich” who take subsidy. Both are not true, of course. If you compared pre-win95 to Macs of the era, you’d laugh at non-Mac machines. Tesla drivers deserve every penny of the “subsidy” since they paid far higher taxes.

        2. alohart says:

          “However, I do rest my case on the fact that Elon built his car on Android, not OSX!”

          It might be more accurate to say that Tesla’s operating system, like Android, is a modified version of Linux. I’m pretty certain that Tesla isn’t modifying Android to create its operating system.

          Both Linux and OS X are based on Unix, so there’s a lot of shared functionality.

  3. Four Electrics says:

    A key difference is that Apple doesn’t do their own manufacturing, and is better off for it.

    Tesla’s fit and finish is also league’s behind Apple in hardware and software.

    Apple also has a deep focus, where Musk is distracted with many things. Tesla’s electric semi is a prime example.

    For Apple, quality and the user experience are paramount. Tesla is not qualify first. Their culture is “trying to meet impossible deadlines.” Huge difference.

  4. orinoco says:

    I hope Elon Musk won’t have the same fate like Steve Jobs. But as I read from his CV his relation to his mother was not the best. That can cause early childhood trauma which results in complex PTSD, which on the very long term can cause so called deseases of civilization, including cancer. If you cannot regulate fear and stress efficiently, you get chronic stress and you poison yourself. When I look at his later life, there are hints that he has complex PTSD.
    I don’t make this up. Scientific brain research shows the evidence. No just correlation but the causal chain.


    Mitsugo no tamashii hyaku made

  5. Doggydogworld says:

    Apple wildly profitable, Tesla not
    Apple obsessed with fit and finish, Tesla not
    Apple drowning in cash, Tesla constantly needs cash
    Apple (under Jobs) develops in secret and blows people away, Tesla pre-announces by years and delivers late

    Yeah, completely parallel

    1. Tech01x says:

      You clearly do not know the history Apple or Steve Jobs. Go look at the early history of Apple and NeXT.

      1. ÜberTrieben says:

        Ok, you are right, “Go look at the early history of Apple and NeXT”.

        Yes, and even better: go to the early history of standard oil or the catholic church. What are you pointing at with such comparisons??

        Nether the less, further down, i made the comparison for you, and Doggydogworld is right with every single statement he made.

        Regards

  6. ÜberTrieben says:

    This comparison between Tesla ans Apple is heard often, it comes from people who doesn’t have a technical background. Those people are restricted to watch only effects but they are unable to analyze deatils on a technical base.

    Murray is partly right, Steve Jobs talent was his strength to analyze ideas other didn´t see in a bigger technical and social environment. Thats what he did with the the Apple I, Wozniak didn´t realized the substance of his own work, Jobs had to force him to be successful. The same with the mouse, window-system and the ethernet at Xerox lab, but Jobs was imaginary in technical terms, he created something new from components, no other could imagine the consequences (like Xerox). The whole difference is that Jobs had a deep technical understanding but no university certificate. And thats the difference. Musk was what some people say, only a “copycat”, so with zip2, with paypal and later with tesla, he never created something new, not even from details. Musk was pushed at zip2 from CEO to CTO and got ousted at paypal as CEO for really silly technical “ideas” which would have let to a bankrupt of Paypal when Musk would established his nonsense… Then he bought into Tesla, he invented nothing or even created something new from genius technical ideas, he only took his money and participated in a company which already made financial losses and still linger on to make financial losses…
    Thats nothing “new”, everybody can buildup a “genius” company when investors are willing to give him billions of dollars to burn. And Tesla is still burning money… When Steve jobs left Apple in the nineties, he bought Pixar from Lucasfilm for 5 millions and sold it to Disney 10 years later. For 7.4 billion dollar. But pixar didn´t produced losses, under steve jobs they created a new category of movies and made profit, every year.

    The comparison of a company like apple to a cash burning company like Tesla is only a product of people who never realized that technique has an influence on society and people. Such comparisons are made by analysts who have a weakness in economy…

    Elon Musk can sell products and can promise people the heaven and can acquire investments, no doubt. What he cannot do i making profit with a company build up from his own ideas. When he created zip2 (an ordinary address book in the internet), he deceived clients when he build a bigger cover around a small personal computer to let this PC look like a minicomputer which were, at that time, much more expensive. He found really a company for his address book! It was compaq and we all know, what mistakes compaq made (and how they ended with his useless address book)…

    Friends, don’t be silly, Tesla is not only making no profits, it is burning cache at a breathtaking speed. Tesla has not even a unique selling proposition, there are many other car manufacturers who could build EV within 3 months, but why don’t they do it? Because it is lossy. Tesla is loosing money with every car they are selling, the other companies want profit, no losses.

    Musk didn’t accomplish his master on the university, he is unable to think like an engineer, Jobs had also no university degree, but he could think like more than one engineer and far beyond of that, he had the vision of the seventies with borderless communication and he “revolutionized” several technical and social areas. Musk invented nothing but a deficit company and lives only from the money of the big, big investment fonds who hold 80% of the shares. If they let him down because the are sick of burning money, Tesla will be less than 0$ worth. Musk is only repeating the same old technology as in the last 100 years, the Teslas have nothing special, they have a shorter range than 20 year old cars, they can only drive with tons of batteries, the technology is nothing new, ordinary batteries, and they cost twice, tripple and more than a luxury european car, which have a much higher build quality. The only purpose for the Tesla cars is to attract more and more investors, thats their “business case”. They have no business case in terms of making profit (they want you to believe that they are making profit, but, of curse, only in ten years in the future or so, maybe later…). Nobody can afford such inefficient and expensive cars which are, on top, not really cleaner: power is generated in atomic and cole plants, every KWh of energy used in a Tesla process nearly as much pollution and more energy like an 20 years old car.

    I was wrong, there is one occasion, where you can compare the technical “expertise” of an Elon Musk to Steve Jobs: Musk was ousted as CEO at paypal because he had the unnecessary and crazy idea at the prospering and upcoming paypal, to switch from Unix to Microsoft (this is always the idea of untalented technical layman, they always want to go with the biggest company because, in their mind, they think that this will make them also big…), which is seen as one of the most idiotic ideas (under many others) a CEO ever had.
    When Steve Jobs created Next, he selected an Unix which was, subsequently, one other (out of many) genius ideas and which put the base for the tremendous success of Apple, the Mac OSX and the smartphone (IOS).

    So, don’t be morons, get the figures and compare them, you can look at finance.yahoo.com. Don´t “analyze” the shares, analyze the earnings and don’t believe the snake oil merchants which will promise you a golden life … in ten years.

    1. lee says:

      you, dear, are utterly clueless – including the English language – and that is putting it mildly…

      1. ÜberTrieben says:

        Excuse me for my bad English.

        I’m sorry, but that makes no difference to a bankrupt company like Tesla…