Ignore The Juicy Swipes, Tesla's Elon Musk Is Excited About Apple Car

Elon Musk recently made some disparaging comments about Apple. Now he's taking them back. Sort of.

Evan Niu
Evan Niu, CFA
Oct 12, 2015 at 10:00AM
Technology and Telecom

There's something about billionaires and innovative companies taking swipes at each other that jumps out to us like the grocery store tabloids. Last week, it was Tesla's (NASDAQ:TSLA) Elon Musk talking about Apple's (NASDAQ:AAPL) poaching of engineers.

You've probably heard the quotes by now, but they're worth repeating.

Important engineers? [Apple has] hired people we've fired. We always jokingly call Apple the "Tesla Graveyard." If you don't make it at Tesla, you go work at Apple. I'm not kidding.

The industrialist then also took an underhanded stab at the Apple Watch. Beyond the juicy quotes, there's naturally a lot more to this story than a quick sound bite. 

Musk wants Apple to make an electric car
Following the widespread coverage, Musk has somewhat backtracked on his remarks, at least the negative implications of them. Over the weekend, he tweeted these comments to make amends.

This actually echoes a comment he made on the May earnings conference call, saying, "I certainly hope Apple gets into the car business. That would be great." As far as Apple Watch goes, Musk clarified that he's just not impressed with the first-generation model, but thinks it'll get there soon enough.

It's a classic example of a celebrity businessman, few of which reach the rock star status that Musk has, dropping some juicy comments off the cuff that don't fully capture his overall view. Musk's goal has always been the mainstream adoption of affordable electric cars. Sure, he'd like you to buy them from Tesla, but he's intimately supportive of the bigger picture that rivals can help catalyze mainstream adoption. That's why he open-sourced all of Tesla's patents last year in the first place.

Popularizing disruptive technology is exactly what Apple does best, so in that sense Apple would be a great ally in the war on fossil fuels.

Show me the money
While Musk brushes aside the possibility that Apple has hired important engineers away from Tesla, it seems like that could have some underlying truth. Even though Tesla shares have pulled back following the Model X launch amid uncertainty around the new SUV's official pricing, Tesla is still executing on its vision incredibly well. But Tesla is not cash rich right now, as it has been investing very heavily in both the Gigafactory and the Model X manufacturing infrastructure.

Quite the contrary, Tesla has been expectedly burning through cash, and conducted a secondary offering in August to bolster its balance sheet. That leaves a potential opening for richer rivals to make lucrative poaching offers, and I'm pretty sure Apple surpassed "stupid rich" a long time ago.

Related Articles

Musk told Bloomberg in February that Apple had been offering 60% salary increases alongside $250,000 signing bonuses to engineers willing to make the switch. At the time, Musk said that Apple had "recruited very few people," but it stands to reason that Apple's aggressive poaching offers could be tempting. Just last month, AppleInsider reported that Apple was making progress with hiring away from Tesla.

Musk might be frustrated, since Jeff Bezos's rocket company Blue Origin similarly poached SpaceX employees in the past, offering "double their salaries," according to the recent Elon Musk biography.

The evidence continues to mount
At this point, there should be little doubt that Apple is taking its car initiative very seriously. There's simply too much evidence to ignore. Of course, it's still a distinct possibility that Apple could abandon the project, but right now it sounds like it's full steam ahead. The latest buzz is that the Mac maker is targeting a 2019 launch. As far as what it'll be called? It won't be iCar -- it will be Apple Car.