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Pro Analysis

Breakingviews: Why Apple and Tesla need each other

Elon Musk
James Glover II | Reuters
Elon Musk

Great partnerships are often forged when each party enjoys a surplus of something the other needs and there's little conflict in their ambitions.

By that logic, two of Silicon Valley's best-known firms, Apple and Tesla Motors, really need each other right now. An investment in Tesla by Apple in return for some of the carmaker's innovation dust might be just the ticket.

Apple Chief Executive Tim Cook is revamping the company's approach to self-driving cars and the gadgetmaker's broader role in the future of transportation. He just fired some of the company's autonomous car team, according to the New York Times.

Along the highway at Tesla, founder Elon Musk needs billions of dollars of capital as he ramps the company up toward making a targeted 500,000 vehicles a year by 2018. He could also use an injection of corporate credibility as his proposed deal to buy his solar-panel venture SolarCity, also publicly traded, appears to be running into unanticipated headwinds.

The idea of Apple acquiring Tesla in its entirety isn't new. It surfaced even before Cook poached some of Musk's engineers a year ago. That move prompted Musk to tell a German newspaper: "If you don't make it at Tesla, you go work at Apple." But it might not require a full purchase to address the two companies' strategic challenges – which, arguably, are each becoming most prominent in areas where the other could fairly easily help.