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Financially, it doesn't make sense. Getting into the car business would pull down Apple's stock. Apple is in a high-margin business. Autos are a low-margin business. When a high-margin company buys a low-margin one, the return on investment declines.

That's the reason Apple can't acquire other large companies. Few companies have Apple's margins. Most acquisitions would drag them down. Even if they're profitable.

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In a world where Apple chooses to invest scarce cash in A or B, with B being low-margin, and then choosing B.

Not in a world where Apple's cash isn't so scarce that it has to choose either, but can choose both.

The real question is, do investments in the car space get it a better return than whatever the return they had on their cash, which was likely quite small, too, and with no upside.

Apple can always use that cash to buy back its stock. Spending it on Tesla has to get better returns than buying back itself for it to be worthwhile.

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