Tesla Motors Inc (TSLA) CEO Elon Musk is talking about Apple Inc. (AAPL) again, addressing the rumors that Apple is setting out to make an electric car of its own.
Musk’s take? AAPL is definitely making one, and TSLA isn’t too worried about it. In fact, in the interview, conducted yesterday by BBC, Musk said he thought Apple’s entry into the area would expand the market, implying it would be a net positive for Apple.
Tesla’s CEO said Apple’s plans to make an electric car an “open secret,” and that it was hard for AAPL to hide its plans when they hired more than 1,000 engineers to make an electric vehicle come to fruition.
Musk — who has derisively called Apple a “Tesla graveyard” where employees go when they don’t make the cut at his own company — also said an Apple car was “the obvious thing to do.”
Less Talk, More Returns
Both TSLA stock and AAPL stock have struggled in the past year to make an impact in the markets — something uncharacteristic for both companies considering their stellar performances in the years leading up to 2015. Tesla shares are up just 3% in the past year, while Apple stock has actually shed 9% of its value over the same period.
Monday’s interview sheds a little more light on how both Tesla and Apple are expecting to juice returns in coming years.
Musk, ever the big thinker, declared that for TSLA to have a real material effect on the world, a mass-produced, affordable electric car would have to be made. Hence, the Model III, which will be priced at $35,000. It’ll finally be unveiled in just a few short months, in March, and will go into production in late 2017, Musk said.
As for AAPL, Tim Cook is still looking to prove to investors that he can oversee the creation of a new blockbuster product to take pressure off the iPhone, which accounts for more than 60% of Apple’s revenue.
With that being said, the most exciting part of the interview, as usual, was Elon Musk’s futuristic musings. Some highlights:
- “In the long-term, nobody will buy a car unless it is autonomous.”
- “Owning a car that is not self-driving in the long-term will be like owning a horse. You would use it for sentimental reasons but not for daily use, really.”
- “You will only drive if you want to drive.”
The takeaway?
TSLA shareholders at least have one reason to not fear Apple as a competitor — the fact that Musk doesn’t. But investors should also know that a certain amount of patience will be needed with Tesla going forward, because one of the company’s biggest catalysts, the Model III, is still nearly two years away.
As of this writing, John Divine was long shares of AAPL stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
