Why Would Tesla Make a Smartphone?

If the rumor comes true, it could help build one of the largest business empires ever — all because of a young boy who dreamt of Mars

Concept of Tesla Phone as imagined by Martin Hajek. Note, this is pure speculation.

There have been a number of rumors about Tesla making a smartphone. Many of the details frankly sound like wishful thinking. But is there actually a case for Tesla making a smartphone?

As crazy as it sounds, I believe it has merit. The reason is that Elon Musk is really big on full vertical integration in all of his business ventures. Let me give some examples of what Tesla builds:

• Custom alloys for the car body
• Electric motors
• Batteries
• Their own charging network

All of this is extremely unusual for the car industry. Most car makers buy all of these things from suppliers. Making your own alloys is downright crazy by auto-manufacturing standards.

Musk’s rocket company, SpaceX, is exactly the same. They make their own rocket engines and control software, building everything from scratch themselves. By contrast, NASA buys software from a variety of suppliers and integrates the different pieces together.