One of the great fantasy stories on Wall Street was dealt a potential blow on Wednesday after reports surfaced that Apple (AAPL - Get Report) was in talks to potentially acquire luxury carmaker McLaren Technology Group.

Apple's interest in the auto business is a poorly-kept secret, with the company in recent years building a team of engineers and designers reportedly working on various electric car and vehicle operating system initiatives.

That interest over time has been incorporated into the bull case for Tesla Motors (TSLA - Get Report) , with some investors believing the downside in Tesla is limited because Apple would swoop in and buy it if operations hit a rough patch and the stock slid.

Apple has more than $230 billion in cash and a desire to make a splash in autos, while Tesla, in the words of BreakingViews columnist Rob Cox earlier this week, would provide Apple with some of its "innovation dust."

Apple would likely be drawn to U.K.-based McLaren primarily for its engineering talent and patent portfolio. Though McLaren is perhaps best known for race cars it is developing electric powertrains and hybrids, and is reportedly seeking funding to boost its R&D efforts.

Shares of Tesla dropped $2 apiece in mid-day trading Wednesday when reports of the Apple/McLaren talks surfaced, and then recovered those losses after a McLaren spokesperson denied talks. While the accuracy of the initial reports is hard to assess, it should be noted that the discussions were reported by multiple independent news sources. Apple has also reportedly been in talks with San Francisco-based Lit Motors.

There was always reason for skepticism about a potential Apple/Tesla tie-up. While Apple is cash-flush Tesla is priced for perfection and would mark a significant shift away from Apple's historically conservative approach to M&A. Tesla's market capitalization is nearly four times that of Fiat Chrysler Automobiles (FCAU - Get Report) despite Fiat in 2015 selling about 40 times more vehicles in North America alone than Tesla did worldwide.

Tesla's premium valuation is in part attributable to the strength of its brand and the charisma of its CEO, Elon Musk. An acquirer would have to grabble with questions over whether Musk would remain involved if Tesla was acquired by a larger entity, and how his potential departure would impact that valuation.

Musk, a showman who enjoys the spotlight and talking off-the-cuff, would seem to be a poor fit in Apple's much more guarded culture.

Given Apple's loyal following and beloved consumer brand, the tech company arguably has less to gain than any other company on earth from buying Tesla's brand. Any potential Apple/Tesla deal would have been about gaining technology, and if Apple brings McLaren in-house or even invests and partners with it the argument for the tech titan to do anything with Tesla diminishes significantly.

It is of course dangerous to ever say "never," and an argument could be made that Apple investing $1 billion or so in Tesla to hedge its bets and form an alliance to counter the work being done in self-driving cars by Alphabet (GOOGL - Get Report) would still make sense even if Apple does join with McLaren. But if nothing else the McLaren talk is a reminder that Apple has plenty of options, and its appears buying into its Silicon Valley neighbor is not as high of a priority as some might have hoped.

Tesla has warned it is going to need billions in cash to get its forthcoming Model 3 to market, and potentially prop-up merger partner SolarCity (SCTY) . Until today there has been some thought that if times got tough, Apple would be there at the ready to provide much-needed funds.

Based on today's chatter, that's a decent chance that belief is nothing more than a fantasy.

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