Apple reportedly still weighing Tesla acquisition as US tax changes loom
Reports suggest Apple continues to consider acquiring Tesla, as changes to US tax policy could make large-scale acquisitions more attractive for the tech giant.
Apple is reportedly still considering acquiring Tesla, according to analysts and US media reports from early 2017. The technology company has long been rumoured to be interested in entering the automotive sector beyond its CarPlay system, with Tesla regularly cited as a potential takeover target.
The speculation has gained renewed attention due to proposed changes to US tax policy under President Donald Trump’s administration. A plan to reduce the tax rate on repatriated overseas cash from 35 percent to 10 percent could give Apple a stronger incentive to spend some of its reported $250 billion cash reserves on a major acquisition. Citigroup analyst Jim Suva identified Tesla as one of several companies Apple might target if the tax change comes into effect.
Tesla and Apple: Ongoing speculation
Rumours of a tie-up between Apple and Tesla have circulated for years, fuelled by reports of staff moving between the two companies and Apple’s secretive automotive efforts, known as Project Titan. Apple has already started testing autonomous vehicles in California and has an energy division that could align with Tesla’s interests in batteries and renewable energy.
Despite the persistent speculation, there is no confirmation from either Apple or Tesla that formal talks have taken place. Tesla continues to operate independently, focusing on expanding its vehicle production and developing new models such as the Tesla Semi, which has been reported to offer a range of 200 to 300 miles (seeReport Tesla Semi to Come with 200 to 300 Miles Range).
Tax changes could prompt tech sector moves
The Trump administration’s proposed reduction in the repatriation tax rate is seen by analysts as a catalyst for major US companies with large overseas cash holdings to pursue acquisitions. Alongside Tesla, Apple has been linked to possible moves for companies in entertainment and gaming. The automotive sector, however, remains an area where Apple’s ambitions are closely watched, given its ongoing investment in autonomous and electric vehicle technology.
