What Everyone Is Missing About Elon Musk's Swipes at Apple

By Alex DUMORTIER, CFAFool.com

U.S. stocks are roughly unchanged early Friday afternoon, with the Dow Jones Industrial Average and the S&P 500 up 0.06% and down 0.05%, respectively, at 12:15 p.m. EDT.

Tesla Motors CEO Elon Musk. Image source:OnInnovation, republished under CC BY-ND 2.0.

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"You get our refuse" is the message Tesla Motors chief executive Elon Musk appeared to send Apple in an interview with German newspaper Handelsblatt.

Here's what he actually said:

When he was asked to comment on Apple's ambitions in the automobile space, Musk was equally scathing:

This is the sort of story people love, as it is illustrates part of what makes Silicon Valley a fascinating place: Intense competition and rivalries, both business and personal, that are stoked by outsized personalities (or egos).

However, by focusing on the confrontational aspect (which people will always enjoy), the media is missing the most significant thing Musk said. It's a single sentence between the two swipes at Apple transcribed above, but you may have glossed over it:

Does Musk mean it's good (for Tesla) because Apple is certain to fail after having discovered how difficult manufacturing cars really is? I don't think so.

First, given how meticulous, even perfectionistic, Apple is with regard to product design and quality, Elon Musk knows full well that it would not venture half-cocked into the car market.

He also knows that if he was able to get Tesla off the ground, Apple has the capital -- human and financial -- to build a credible car business. Where it is missing talent, Apple can certainly attract it, and those people are unlikely to be "rejects" -- from Tesla or anywhere else.

He also knows that if Apple were to launch an electric car, it would broaden the entire market, giving it greater visibility and legitimacy -- and helping bring costs down for the industry through higher volume.

Elon Musk's goal is to create mass-market electric cars, but the demand simply doesn't exist right now. Apple could be an agent of positive change toward that goal.

There's a reason Elon Musk decided to open up Tesla Motors' patents to competitors, and it isn't that he wants to put himself out of business.

Co-opetition is not unheard of in the auto industry, either: PSA Peugeot Citroen and Toyota share components on a city car. Fierce competition may make for a better story, but sometimes co-opetition is more effective in achieving your goals.

The article What Everyone Is Missing About Elon Musk's Swipes at Apple originally appeared on Fool.com.

Alex Dumortier, CFA, has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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