By Tim Higgins
Tesla Inc.'s effort to bring out its Model 3 brought the
electric car company near collapse in 2018. Now Chief Executive
Elon Musk has divulged a new twist: He says he contacted his Apple
Inc. counterpart, Tim Cook, to save his company.
"During the darkest days of the Model 3 program, I reached out
to Tim Cook to discuss the possibility of Apple acquiring Tesla
(for 1/10 of our current value)," Mr. Musk said in a tweet Tuesday.
But the Apple CEO, he said, "refused to take the meeting."
Mr. Musk revealed the latest detail as he worked to question
whether Apple is serious about bringing out an electric car of its
own amid a new report the company is pushing for 2024
production
On Twitter, Mr. Musk called the report "strange, if true."
Tesla has built a brand for itself as a Silicon Valley auto
maker offering high-tech cars with promises of fully self-driving
technology on the near horizon. The specter of a driverless,
electric car made by tech giant Apple could prove the kind of
fierce competition that traditional auto makers, such as General
Motors Co. and Volkswagen AG, have yet to muster.
In 2014, Apple began working on its own car project, dubbed
Project Titan, details of which emerged in early 2015. The project
has gone in fits and starts.
Apple has been making plans to begin production of an electric
car as soon as 2024, a person familiar with the effort said.
Reuters earlier reported the new timeline.
The Apple project is being headed up by Doug Field, a longtime
Apple executive who left the company for about five years to work
at Tesla, where he oversaw the development of the Model 3. He left
in 2018 and returned to Apple, where he began work on the car
project.
Apple declined to comment.
Mr. Musk on Tuesday didn't specify exactly when he approached
Mr. Cook.
Launched in 2017, the Model 3 proved harder to build than Mr.
Musk expected. Costly delays mounted before Tesla eventually worked
through production and delivery snags in 2018, when it posted
profitable quarters in the second half of that year. It continued
to struggle the early part of the following year, however.
In August 2018, Mr. Musk shocked investors with the idea of
taking the electric-car maker private in what would have been the
biggest buyout in history. Mr. Musk at the time wrote on Twitter:
"Am considering taking Tesla private at $420. Funding secured." The
deal didn't happen, and the tweet spurred a Securities and Exchange
Commission probe and legal battles with the regulator.
As Mr. Musk tried to make a deal work to take Tesla private, his
advisers sought funding from several places, including Volkswagen.
He eventually scuttled his effort.
By the third quarter of 2019, Tesla had turned the corner and
kicked off a string of quarterly profits, exciting investors who
have sent the company's shares soaring and made the company the
most valuable auto maker in the world with a value of more than
$600 billion. It was added to the S&P 500 index, a key
benchmark, on Monday.
Excitement around the company has allowed Tesla to raise
billions of dollars for what Mr. Musk has described as his war
chest.
Mr. Musk didn't respond to questions about his latest tweet.
The Model 3 wasn't Tesla's first troubled car introduction --
all vehicles up to that point had been painful. The company's first
vehicle, the Roadster sports car, almost led to the company's
collapse in 2008 and the Model S large sedan in 2012 was also
troublesome. During that period, Mr. Musk turned to Google about a
potential deal, people familiar with the situation have said.
When sales of the Model S kicked in during the first quarter of
2013, Mr. Musk was able to post the company's first quarterly
profit and he quickly raised more money amid the excitement about
the company's future.
Mr. Musk's success with Tesla has spurred investor enthusiasm in
electric cars and other advanced driving technologies. It is also
leading to more competition for Tesla. Traditional car-making
rivals are ramping up their electric vehicle efforts. And rivals
working on self-driving car technology, such as Waymo LLC, a unit
of Google's parent Alphabet Inc., also are securing funds to ramp
up their activities. Amazon.com Inc. in June said it was buying
autonomous car-developer Zoox.
Talk of an Apple-Tesla tie-up has often circulated around
Silicon Valley. During a 2015 shareholder meeting, Mr. Cook
sidestepped shareholders pushing for a deal. "Quite frankly, I'd
like to see you guys buy Tesla," one investor told Mr. Cook during
the meeting -- a sentiment met with laughter and applause.
Apple typically has eschewed big acquisitions. It bought Beats
Electronics LLC for $3 billion in 2014, though has never done a
transaction near the scale of what Tesla would have cost.
Since his earliest days as CEO, Mr. Musk has turned to Apple for
key hires and inspiration, from store designs to a large,
flat-screen, touch panel in the Model S.
As Apple became more interested in cars, a war for talent
ensued. Mr. Musk complained to Bloomberg Businessweek in a 2015
article that Apple was trying to poach his engineers with offers of
$250,000 signing bonuses and 60% salary increases. He later
lamented to German newspaper Handelsblatt that Apple hired those
who couldn't handle working at Tesla. "We always jokingly call
Apple the 'Tesla Graveyard,' " he was quoted saying in 2015.
Still, it has been clear that Apple has been in Mr. Musk's
sights. That year, he also told investors that he saw a path for
Tesla by 2025 to be as valuable as Apple was at the time, which
then was $700 billion.
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
December 22, 2020 18:34 ET (23:34 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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