Exclusive: Piper Jaffray's Gene Munster Explains Why Apple Should Buy Tesla

In an interview on Bloomberg Radio (http://www.bloomberg.com/podcasts/surveillance/), Piper Jaffray analyst Gene Munster said that Apple Inc.
AAPL
should consider acquiring Tesla Motors
TSLA
. He told hosts Tom Keene and Michael McKee that the electric car company is "the big thing that they could buy that I would be impressed with." Apple Inc. is sitting on over $203 billion in cash and is therefore well-positioned to pursue M&A. We spoke with Munster to glean some details on why Tesla might represent an attractive prospect. "The chemistry of cars is going to change dramatically over the next 10-15 years," he told Benzinga. "Tech companies have a real opportunity to box out traditional automotive guys." Particularly, he believes that firms like Apple have several cost advantages over more established auto companies. He explained that access to Tesla's battery technology could accelerate Apple's entrance into the car world. Plus, "[electric cars] are part of what's in Apple's DNA," Munster said, noting the recent hire of former Chrysler
FCAU
executive Doug Betts (http://www.engadget.com/2015/07/20/apple-hires-fiat-chrysler-quality-lead/) to help oversee its planned foray into the automotive space. He admitted that "people close to Tesla" told him that CEO Elon Musk probably wouldn't be immediately receptive to a buyout. However, Munster maintained that the executive has only two options at this point: "sell or get comfortable with Apple as a competitor." He believes that a partnership between the two firms could yield immediate benefits for Tesla. "Instead of having tens of billions of dollars to fund [his] dream," he said of Musk, "[he] could have hundreds of billions" if he teamed up with Apple. And putting it plainly, "you need to be more funded than he is...he has to get comfortable with sharing the opportunity with someone else." For now, Apple is still down 5 percent after reporting disappointing iPhone sales on Tuesday. Tesla, meanwhile, is hovering around 0 percent for the day.

Posted In: Analyst ColorNewsM&AAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.