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Apple Will Never Buy Tesla

By Evan Niu, CFA and Erin Kennedy – Feb 23, 2014 at 3:00PM

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All the recent talk about Apple buying Tesla is just plain silly. Despite Steve Jobs dreams of making a car, this fantasy will never become reality.

There has been a lot of talk this week about Apple (AAPL -1.23%) possibly buying Tesla Motors (TSLA -3.64%), after Tesla CEO Elon Musk confirmed that the two companies have had "conversations." The rumors have sparked a wide range of emotions among investors, but is there any truth, or practical sense, to the idea?

In this video from Friday's Tech Teardown, Motley Fool tech and telecom bureau chief Evan Niu discusses why the narrative here may sound exciting on the surface, with many having compared the two companies to each other over the years as exciting disruptive innovators within their industries. However, he also tells investors why in his opinion, the deal couldn't make less sense financially. While Apple CEO Tim Cook did say recently that "huge" acquisitions aren't out of the question which may have fanned the flame further on these rumors, Evan notes that at an estimated $30 billion to buy Tesla which is in no way related to Apple's wheelhouse or core offerings, he sees this as a terrible fit.

Erin Kennedy owns shares of Apple. Evan Niu, CFA 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. 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.

Stocks Mentioned

Apple Stock Quote
Apple
AAPL
$141.16 (-1.23%) $-1.75
Tesla Stock Quote
Tesla
TSLA
$173.28 (-3.64%) $-6.54

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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