Can Apple Actually Buy Tesla

Apple Inc. the tech giant has a hefty amount worth $200 billion in cash. It is now being assumed that the company will use this amount to buy Tesla Motors Inc. this statement was made by Daniel H. Ives an analyst at FBR Capital. According to him, "Heading into 2016, Apple and [CEO Tim] Cook are entering a critical juncture from a product, growth, and strategic perspective.”

Apple is reportedly working on its automotive venture namely Project Titan, which is devoted to manufacturing electric cars in the coming five years. Making electric cars for the first time requires time and can also take ten years to manufacture. So the company can ramp up the technology bu buying the battery technology of TSLA that is far more superior claims Ives. This will help the tech behemoth to make a strong debut in the automotive industry.

If this purchase is carried out then it will actually result in making the range of electric cars more accessible to the masses. The automotive giant already has two models in the production phase namely Model X and Model S.

Model X is the high end car that was launched earlier in September with starting price of $80,000. The company is also working on Model 3, which is in its initial stages and is likely to be priced at $35,000 at the time of its launch. By establishing the basis of these models, Apple can minimize the time span of the development phase so if this is possible then we will see Apple cars earlier than expectations.

Mass market volumes are the only way through which the economies of scale for automotive software and electric batteries can be made possible. Mr. Ives claimed that establishing a factory can take a lot of time. In contrast, buying out a factory that is already established is relatively easy.

Tesla at this point of time is making its Gigafactory plant that will be situated at Nevada. The factory is aimed at producing lithium ion batteries for its electric cars. This will assist in minimizing the cost thus achieving the economies of sale by manufacturing 500,000 batteries. Residential and enterprise consumers will also benefit since the batteries will also be retailed to them in future. This technology can be a revolution in the world of global infrastructure of energy as claimed by Elon Musk, the chief executive officer of the company. The ability of Musk can add value to Apple’s operations.