Why Apple is Rooting for Tesla

What Do Apple and Telsa Have in Common?

On the surface of things, Apple and Tesla have very little in common. Besides being two of the most successful and looked up to companies in the world, Tesla’s domination of the electric auto industry seems to have nothing to do with Apple’s endeavors in the personal computers and mobile technology fields.

So why is Apple now looking to Tesla to give it a boost against its competitors?

Tesla’s “Gigafactory”

Tesla Motors has announced plans to open a battery making mega-factory in partnership with Panasonic, a big player in the lithium-ion battery manufacturing field, by 2017.

The company projects that the Gigafactory will reduce battery costs by as much as 30%, a giant leap in energy storage technology for electric car manufacturers, but also a huge leg up for all companies that rely on lithium-ion batteries to power their products.

The construction of the Gigafactory is already well on its way, and the projected production output of the factory for 2020 actually exceeds the global production levels recorded in 2013:

What’s Apple got to do with it?

Apple and other mobile tech manufacturers stand to profit immensely from the improved and cheaper batteries Tesla will be able to offer them in just a few years.

Moreover, Tesla’s future offering stands to take a sizable chunk out of the revenues of Apple’s biggest competitor, Samsung. Since severing ties with Samsung’s SDI as their battery supplier in 2012, in an effort to undercut the company’s earnings, Apple has been bouncing around from one battery manufacturer to another, trying to find the most cost effective solutions for its latest iPhone line.

Tesla’s Gigafactory could provide the permanent solution that Apple has been looking for, and help the company increase profits by cutting manufacturing costs substantially, while at the same time driving business away from Samsung.

All in all, Apple has its fingers crossed that Tesla will come through on its promise, and with Elon Musk’s track record, that seems more likely to happen than not.

Join the discussion now on the Apple and Tesla market pages on eToro OpenBook.

Article Written By: Abby Tsype