A few years ago, Elon Musk tried to interest Apple CEO Tim Cook in buying Tesla, Musk said in Tuesday tweet. “He refused to hold a meeting,” Musk added.
According to Musk, this happened in the “darkest days of the Model 3 program” – most likely sometime in late 2017 or early 2018. Musk recently discovered that at one point at the beginning of the production process of the Model 3 Tesla was “about a month” from bankruptcy.
“Ramp Model 3 has long been extreme stress and pain – from mid-2017 to mid-2019,” Musk wrote in November. “Hell of manufacturing and logistics.”
Although the Model 3 was not Tesla’s first car, it was the company’s first attempt to build a mass-market vehicle – which could sell for less than $ 40,000 and win hundreds of thousands of customers each year. Although the car was cheaper, the equipment needed for higher production was more expensive than Tesla’s previous production lines.
Musk had an ambitious plan to automate the Model 3 production process, using robots for tasks traditionally done by human workers. But things did not go the way Musk had hoped. Building the necessary robots was more difficult and expensive than expected. Some did not work properly. So Tesla was eventually forced to reduce its automation plans and build a more conventional assembly line.
“Excessive automation in Tesla was a mistake,” Musk said admitted in 2018. “People are underrated.”
The design of the Model 3 and the setting up of its product line was so expensive that Tesla’s survival depended on the success of the Model 3. Had Tesla failed to start selling the Model 3 by mid-2018, it would have run out of cash debt.
Tim Cook was not interested
Apparently, at some point during this process, Musk became so worried about Tesla’s survival that he considered selling the company. Apple would be a logical candidate. It was (and is) one of the largest companies on the planet, with more than $ 70 billion in cash and short-term investments. He could easily afford Tesla’s market estimate of $ 60 billion.
Apple and Tesla also have similar design philosophies. Both are known for vertical integration, creating their own hardware and software, and selling their products online and in company-owned stores.
But according to Musk, Apple CEO Tim Cook was not interested. When Musk reached for Cook in 2017 or 2018, Cook did not even refuse to hold a meeting on the subject.
At the time Musk contacted Cook, Apple was working on a car project called “Project Titan” for several years. Titan reportedly began as a plan to build the Apple Car, but then returned to creating self-management software to license existing carmakers. On Monday, Reuters reported that Apple is again working on creating its own car.
With a backward advantage, it seems that buying Tesla in late 2017 would be a good thing for Apple. Tesla’s market capitalization today is 10 times higher than in 2017. After the difficult introduction of the Model 3 in 2017 and 2018, things started to go smoothly. Tesla launched the Scheduled Model Y, built a factory in China, and is now working on building two more factories in Texas and Germany.
Musk’s offer to Cook was not the first time he had thought about selling Tesla. According to a 2015 biography of Musk from Ashlee Vance, Tesla had a similar crisis in the first quarter of 2013. The Model S was introduced the previous year, but early sales were so slow that Tesla’s survival was called into question.
According to Vance, Musk signed a “handshake deal” with Google founder Larry Page in March to buy the company for about $ 6 billion. But while lawyers bargained over details, sales of the S model improved enough to rescue Tesla from imminent danger. Tesla recorded unexpected earnings for the first quarter, and Tesla’s share price rose. Tesla remained independent.