The Apple and Tesla Alliance That Could Work

While Apple probably won't be acquiring Tesla, there is one alliance that could make sense for the two companies.

Mar 4, 2014 at 9:30PM

Apple (NASDAQ:AAPL) will probably not be acquiring Tesla (NASDAQ:TSLA). But that doesn't mean the companies couldn't work together. In fact, they have one common factor that could lay the foundation for a long-term partnership: batteries.

Tsla Battery

Tesla's fully electric Model S uses a lithium-ion battery. It is installed on the floor of the car.

Apple has the cash, Tesla has the batteries
"Apple and Tesla need about the same tonnage of batteries this year," explained Monday Note's Jean-Louis Gassee. Given the companies' common interest in massive amounts of lithium-ion, Jean-Louis explores the idea of an alliance between Tesla and Apple based on batteries.

Tesla CEO Elon Musk did admit in an appearance on Bloomberg TV that the electric-car maker met with Apple's head of acquisitions, Adrian Perica, last spring. But Musk said any purchase would be "very unlikely."

Musk continued:

We need to stay super focused on... creating a compelling mass-market electric car. And I'd be very concerned in any kind of acquisition scenario, whoever it is, that'd we become distracted from that task which has always been the driving goal of Tesla.

But Gassee, who was a high-level Apple executive in the eighties, proposes an alliance founded on the companies' common interest in lithium-ion and that it could make sense. In an article on Monday Note, he writes:

A more likely explanation for Apple's conversation with Tesla might be something Apple does all the time: Sit with a potential supplier and discuss payment in advance as a way to secure supply of a critical component.

Of course, neither Tesla nor Apple will comment. Why should they? But a partnership born of their comparable needs for battery volumes makes a lot more sense than for the two companies to become one.

Tesla's recent announcement that it will be building a massive battery mill called the Gigafactory, which will cost between $4 billion to $5 billion, is an excellent reason for Tesla to look to Apple for a potential alliance. A few billion-dollar investments from Apple in exchange for a supply arrangement with the world's most scaled lithium-ion supplier could make sense. The investment wouldn't even budge Apple's cash hoard.


Rendering of Tesla's planned Gigafactory. Image source: Tesla.

A way for Tesla to diversify?
The biggest problem for such an arrangement would be the obvious difference in a vehicle battery compared to the batteries used for Apple's increasingly thinner devices: Producing much larger vehicle batteries would require a different manufacturing process than that used for producing small consumer electronics batteries. But supplying gadget batteries could be a way for Tesla to diversify while also paving the way to making a separate business out of supplying batteries for various purposes.

Wired author Marcus Whohlsen recently chimed in on the topic, too: 

If Tesla really produces batteries at the scale it's promising, cars could become just one part of what the company does. One day, Tesla could be a company that powers just about everything, from the phone in your pocket to the electrical grid itself.

Apple will probably not acquire Tesla. But that doesn't mean the companies couldn't work together.

A strategy for finding growth stocks that works
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Daniel Sparks owns shares of Apple and Tesla Motors. The Motley Fool recommends Apple and Tesla Motors. The Motley Fool owns shares of Apple and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers