Why Apple is Likely to Buy Tesla

Steve Kanaval |

Tesla_Model_S_digital_panels.jpg

Ten years from now, Tesla Motors Inc. (TSLA) will NOT be about cars. Instead, it will be about the battery that powers them, and we will all say that Elon Musk saw the future as clear as Galileo.

Ten years from now (maybe even sooner) cars will drive themselves entirely on their own and 16 year old children will NOT be attending Drivers Education classes in high school. Intead, they will be learning to operate the vehicle remotely from a wrist powered device, where the focus is understanding the vehicle technology, and some small portion of the class will be devoted to manually operating the car in case of emergency, much the way we learn to change a tire today.

Tesla investors know that auto makers like Ford Motor Company (F) and General Motors Company (GM) are hurrying electric cars into production and this has little to do with gas prices, it is a natural outgrowth of the human quest for efficient technology to make our lives more efficient. This quest will never end, and visionary entrepreuers like Steve Jobs spent much time setting the table for Tim Cook at Apple Inc. (AAPL)

Elon Musk...Future CEO of Apple?

Elon Musk would rather have Apple stock and be on the Board of Directors at Apple and position himself to be CEO of the company one day, much like Jobs did when he relinquished his role to a beverage guy before taking Apple to new heights.

Cook will have no choice but to buy Tesla as the hand of Steve Jobs taps him on the shoulder and explains that the auto will be the next “cash cow accessory of the text generation” he has been selling iPhones to and if they position themselves correctly they can sell technology to upcoming generations the same way they did to the texters amassing 150 billion in cash in the Apple Bank.

Tesla is NOT about auto’s. Tesla is about batteries - for your home or office as an inexpensive alternative fuel source. Similarly, Apple is NOT just a cell phone company, as they dedicate 1000+ workers to cars. Apple is NOT working on engines or the power source – they are working on the way the car works and the experience associated with it because the person in the car is NOT driving - they are riding.

If you have driven or traveled long distances lately, tell me you did not charge your iPad or  make sure you had some sort of music or content available to make the the time pass quicker. Apple is working on this experience, and Elon Musk is working on the battery to power the vehicle. Ten years from now you will look back and text while you're driving…the only difference will be, it will be entirely OK to do this.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
TSLA Tesla Motors Inc. 185.44 -1.36 -0.73 3,056,689
AAPL Apple Inc. 109.57 0.46 0.42 20,580,307
GM General Motors Company 35.06 0.12 0.34 9,466,610
F Ford Motor Company 12.56 0.12 0.92 19,234,693

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