Warren Buffett says it would be 'a very poor idea' for Apple to buy Tesla (TSLA, AAPL)

August 31, 2018

Warren Buffett says it would be 'a very poor idea' for Apple to buy Tesla (TSLA, AAPL)

warren buffett

Warren Buffett doesn't think it would be smart for Apple to buy Tesla.
Some have argued that the tech giant should purchase the electric automaker, but in an interview with Fox Business Network on Thursday, Buffett said buying Tesla "would be a very poor idea" for Apple.
He said that building a long-term competitive advantage in the auto industry is much more difficult than in the tech industry, where companies can use speed, scale, and network effects to maintain an edge over competitors.
Buffett also said Tesla CEO Elon Musk should have immediately clarified his controversial "funding secured" tweet earlier this month.

Warren Buffett doesn't think it would be smart for Apple to buy Tesla.

Some have argued that the tech giant should purchase the electric automaker. Business Insider's Matthew DeBord wrote that by acquiring Tesla, Apple could position itself to capitalize on potentially lucrative new business models, like ride-hailing and autonomy, that could define the future of transportation.

But in an interview with Fox Business Network on Thursday, Buffett said buying Tesla "would be a very poor idea" for Apple. He said that building a long-term competitive advantage in the auto industry is much more difficult than in the tech industry, where companies can use speed, scale, and network effects to maintain an edge over competitors.

"You can win in autos one year and you lose the next," Buffett said.

Buffett also addressed Tesla CEO Elon Musk's controversial tweet in which he said he had secured the funding to convert Tesla into a private company. The tweet reportedly prompted an investigation from the Securities and Exchange Commission, and reports that emerged after the tweet have cast doubt on Musk's claim. (Musk said on Friday that Tesla would remain public, but said he believed there was "more than enough funding" to take the company private.)

Buffett said Musk should have quickly clarified what he meant when he said he had "funding secured," perhaps adding that, while he was confident in his ability to find backing for a go-private deal, the deal was not final.

"If you misspeak, you correct it immediately," Buffett said.

Earlier on Thursday, Buffett had said Musk's prolific tweeting habits were counterproductive.

"I don't think it's helped him a lot," he said during an interview with CNBC.

Have a Tesla news tip? Contact this reporter at mmatousek@businessinsider.com.

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