Why Tesla need Apple and Apple need Tesla

Tesla are losing money at an incredible rate. According to The Verge, they lost around $785 million in the first quarter of 2018 and are down to cash reserves of only $2.7 billion, after starting the year with $3.4 billion. If they carry on at this burn rate they will run out of cash and have to file for protection by the close of 2018.

Apple, on the other hand, are making money like it’s going out of fashion. In the last quarter of 2017 they made a profit of $20.1 billion. This leaves them in a position where they have retained profits of $91.9 billion.

But when did Apple last create anything that was truly disruptive? The iPod, the iPhone? maybe the Apple TV?

All of their recent lunches have been derivations, not innovations.

Their launches over the last number of years have been dull to say the least. But there’s little doubt they design some of the most sought-after products in the world that carry an incredible premium price.

On the surface this is similar to the Tesla.

It was a disruptor in the passenger car market and their Semi is sure to disrupt the market for Heavy Goods Vehicles. If you’ve ever driven a Tesla, it’s hard to argue that they are anything other than quick, but their fit and finish is poor. It’s nowhere near as good as the products coming in from the German manufacturers Audi and Mercedes and a long way behind the British designed Jaguar iPace – All of which will match the Tesla for range in the next few years.

The Jaguar iPace at the Electric Innovation Centre in West Bromwich UK
The Jaguar iPace at the Electric Innovation Centre in West Bromwich UK

When these products hit the mainstream market, they will have a serious impact on Tesla sales. The competitors’ products just look and feel better. The one area Tesla continue to lead is in their battery technology – which for me as an iPhone owner, is another serious Apple weakness.

So Tesla need design input, they also need cash – desperately if they want to continue to compete. The interior of the Tesla is just plain bland and for me, cars like the Model X are different, but ugly and overcomplicated. The gull-wing doors are schoolboy stuff, designed by someone with a Countach poster on their wall as a kid. For me, they have no place in the real world.

Apple need to advance their battery technology and look for an outlet for their cash that is going to give their shareholders a long-term return. We know Apple are working on a car, it’s been leaked all over the place. When Apple do eventually launch, are they really going to be satisfied with the standard charging system available to everyone else?

The answer has to be no.

They even had to design their own charging plug and headphone socket for their phones!

The Tesla charging network is already worldwide and can deliver charge at exceptional rates.

Tesla Model S recharging

We know that Dyson, who have some of the most advanced motor technology, are working hard to produce a car too. Autocar have produced their own drawing of what this may look like here. It’s quite cool and they could again come in as another disruptor to the car market.

Dyson car by Autocar

So for me, Apple and Tesla throwing their technology and design together will be the perfect match. Working together with Apple’s cash, will leave them both in a considerably stronger position than the sum of the parts.

I’m not sure which of the stocks to advise investing in, but maybe wait until Tesla tanks a little further and then swoop in, as if Apple come to town with the Tesla, it is going to be a world beater and every major car manufacturer needs to take note.

They are two brands that have made their name for innovation. Their brand values overlap in almost every way and there doesn’t seem to be anything that would stop them working together apart from some bloody-mindedness from Apple because the existing Tesla model range wasn’t their initial concept. To me though, it seems like their innovation and their organisational culture – such as single-minded strong leader, obsession with detail, being a massive disrupter in new markets – are completely complementary and both need each other to grow to the next level.

So, watch this space. It’s going to happen.

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The Paul Smith Jag eight years later

In 2001, Paul Smith, the stunningly cool fashion designer put his name to a project with Jaguar to raise money for Macmillan cancer relief.

He ‘personalised’ an X-Type Jaguar which was subsequently sold for £40,000 to City banker Zoe Appleyard and her friend Maya Schonburg.

Paul Smith Jag
Paul Smith Jag

A huge cast of stars from Kylie to Sir Elton John were at the auction and they all got a jolly warm glow as well as raising over £200,000 in total for a brilliant cause. You can read the full story here.

And I saw the very car today, complete with lookalike Paul Smith (P5) numberplate.

The PS stripes look great on his Evian Water bottles, but automotive design changes faster than any other I know. What works know may look very dated in five years and awful a few years at the time. The Austin Metro even looked okay at one time and that time was it’s time. It looked even better with a bit of high class Burberry branding added. Hmmmmm.

The Burberry Mini Metro - an object of true class
The Burberry Mini Metro - an object of true class

I’m not sure how well the stripes look on the Jag now. In fact I think they look a bit horrid, so for the sake of ongoing brand values, it may have been a good idea to have a time limit on its branding, for say, five years, before any trace of it was removed and the car de-branded.

That time has now passed and so for me should the Paul Smith branding on this car, which only serves to look a bit garish and dated.

Updated

Simon Dare commented that the car is now owned by Paul Smith again and is driven by their Finance Director. Poor bugger. It’s going to be difficult to hide in that car isn’t it!

Rob Marshall also commented below that the Paul Smith Mini still looked good. I’m not so sure myself, but it takes all sorts. The link he put through is this car here.

The Paul Smith Mini in full stripy loveliness - one of only two made
The Paul Smith Mini in full stripy loveliness - one of only two made

Which is a very limited edition of around 2 cars according the Paul Smith Mini website.

This car had 84 stripes made up of 24 different colours and had to have been hand made.

There then followed a less limited edition Paul Smith car where 300 were made in a special blue colour and they were luxurious for a Mini! Madly british with gold plated UK bonnet badge and hidden lime green detailing, I would say this looks like a real classic if you can get your hands on one in good condition.

Here’s one of the 300, which I think is far more discreet and tasteful!

The rather more tasteful Paul Smith Mini in blue
The rather more tasteful Paul Smith Mini in blue

Anyway, if anyone knows of any other good designer branded cars, let me know. I don’t want to know about the car that Stephen Ireland ‘customised’ for his girlfriend. It’s a monstrosity of a Bentley!

The Bentley that Stephen Ireland 'customised' for his girlfriend - Class, pure class
The Bentley that Stephen Ireland 'customised' for his girlfriend - Class, pure class

Or even El Hadji Diouf and his chromed Mercedes SLR. William Gallas has one too by all accounts.

The really unpleasant Mercedes SLR in a fetching chrome finish
The really unpleasant Mercedes SLR in a fetching chrome finish

They’re not designer cars, they’re just vile.