Apple developing their own car?

[Lump]

Apple meets California officials to discuss self-driving car | Technology | The Guardian

The fact that Apple is approaching the DMV now suggests that its autonomous vehicle, whatever it might be, is almost ready for public view. According to documents obtained by the Guardian,

 

[tftf]

While I also discussed/predicted that Apple will target the (personal) transportation sector back in 2014 (following Wearables such as a watch and AR/VR), I think the Guardian is a bit too optimistic regarding the project (Apple might still scrap it) and especially the timetable involved.

These discussions don't have to allude the project is "close to unveiling" imho, Apple might just have preliminary talks with officials:

According to documents obtained by the Guardian, Mike Maletic, a senior legal counsel at Apple, had an hour-long meeting on 17 August with the department’s self-driving car experts Bernard Soriano, DMV deputy director, and Stephanie Dougherty, chief of strategic planning, who are co-sponsors of California’s autonomous vehicle regulation project, and Brian Soublet, the department’s deputy director and chief counsel."

I don't think Apple can launch a car before 2019-2020 (and the first version might only have ADAS similar to other cars launched by the end of this decade, I don't think legislation will be ready for autonomous vehicles even if technology progresses fast enough).

 

[burkevalocks]

I dont believe that Apple will launch their self driving car anytime soon. I am sure its still in the works. But we have a long time until they actually hit the streets and people start purchasing them.

 

[yobigd20]

Apple electric car release date: 2019. Apple Speeds Up Electric-Car Work - WSJ

 

[Johan]

For one thing I think if/when Apple say they officially will be selling a car in 2019 I believe them ahelluvalot more than if Audi/BMW/Mercedes say they will...

 

[yobigd20]

another article, apple hired 1200 to work on it: Pedal to the metal: Apple reportedly accelerates Project Titan timeline to 2019, triples development team size | 9to5Mac

 

[tftf]

I don't think Apple can launch a car before 2019-2020 (and the first version might only have ADAS similar to other cars launched by the end of this decade, I don't think legislation will be ready for autonomous vehicles even if technology progresses fast enough).

Looks like the WSJ sources agree.

In any case, a car project involves so much testing (and hiring battery/car experts, see the latest 9to5mac article) on real roads and under different weather/climate conditions that Apple can't hold this under wraps for much longer. It's an open secret by now anyway, back in 2014 only a few industry insiders talked about the project.

I remember many people called me crazy when I predicted a full-fledged Apple car a year ago. At that time, many still believed this was just about a few additional hirings for a glorified CarPlay version 2 or similar...

 

[roblab]

Since we know that all the entrenched automakers are unable to change for myriad reasons, and that electric cars are going to take over transportation in the near future while gas/diesel go the way of the dodo bird, Olivetti typewriters, Kodak film, etc, I see no problem with Apple trying to get a spot in the new market, which will be much larger than Tesla can hope to fill easily.

I expect Tesla to be a leader. If Apple wants to jump in, I wouldn't doubt that there will be plenty of room as GM, Toyota, etc., etc. shrivel and die because the are unable to compete.

 

[tftf]

I expect Tesla to be a leader. If Apple wants to jump in, I wouldn't doubt that there will be plenty of room as GM, Toyota, etc., etc. shrivel and die because the are unable to compete.

Tesla at best can produce about 500k cars by 2020. That's about half a percent of projected passenger car marketshare by 2020 (a lot will depend on China/Asia, beyond 2020 also Africa, on the demand side).

Where will the other 99.5% supply come from? Certainly not from Apple and the other potential EV entrants.

It's impossible for EVs (even including PHEVs) to get more than a few single-digits of marketshare by 2020. The car market will still be dominated by the existing giants in five years even if there are a dozen or so new EV entrants.

Many seem to overestimate the rate of change in the car industry, it will take 1-2 decades for EVs to get meaningful double-digit marketshare and who knows where Tesla will be then (if it's still around by then).

PS: Existing car companies such as Nissan-Renault and VW already lead EV unit sales in halo markets such as Norway, not Tesla.

 

[Johan]

Many seem to overestimate the rate of change in the car industry, it will take 1-2 decades for EVs to get meaningful double-digit marketshare and who knows where Tesla will be then (if it's still around by then).

Tesla will be the market leader in EV car sales at least in $$$ in 2 decades, if they haven't split up in several subsidiaries by then (at least 2 decades is a very long time horizon). Also do not underestimate the rate of change in technology and society (pro tip: the rate of change is accelerating, which makes the actual curve of change somewhat exponential. Just because automobilies today in 2015 have a typical life cycle of 10 years or something doesn't mean they will in 1-2 decades).

 

[jerry33]

It's impossible for EVs (even including PHEVs) to get more than a few single-digits of marketshare by 2020. The car market will still be dominated by the existing giants in five years even if there are a dozen or so new EV entrants.

It took from 1946 to about 1975 for radial tires to become standard on some vehicles.

 

[Lump]

Volkswagens scandal has to put a huge smile on Tim Cooks face, Apple can now pick off cheap assets or negotiate incredible deals from a company in crises.

 

[tftf]

Volkswagens scandal has to put a huge smile on Tim Cooks face, Apple can now pick off cheap assets or negotiate incredible deals from a company in crises.

All I have seen Apple doing is poaching the right car and battery talents from various companies. They usually don't buy companies with lots of assets or employees, they are "only" focused on the patents or access to the right technologies such as:

I once heard a rumor that Apple had acquired some of the patents (like this one) and some of the team from a now defunct thin battery startup called Infinite Power Solutions. I wasn’t ever able to confirm that as more than a rumor, but Apple has scooped up talent from other ailing battery startups over the years.

Why Apple would benefit from building electric car tech Gigaom

In addition to batteries, another focus could be carbon fiber (BMW, SGL Group), but this would again be a very focused approach.

Even recent music target Beats, a relatively small company with a few hundred people, many of which were let go after the M&A, was the exception to the rule. Apple didn't buy a huge music company back in 2003-2005 (as many expected) and so far it didn't buy a content company (Netflix etc.) or a car/EV company (Tesla or similar, as brought up by Berenberg Bank and others).

I think Apple with now close to 2000 experts on the project (according to the linked WSJ article) will go down the personal transportation route alone for the most parts.

It's another open question if Apple wants to even go into integrated manufacturing, they could use contract manufacturing as for their CE devices and PCs (Foxconn, Magna...). Of course this approach is less common in the car industry, but never say never.

Apple likes to break rules and tries new approaches across the entire value chain. I quoted Asymco (see three bullet points below) on this in my Feb 2015 Apple car article on SA:

Some observers call Apple a "bank" with regard to its relations with key suppliers:

• From a fiscal perspective, Apple is acting like a trade lender (with moderate to low returns on capital.)
• From the operational perspective Apple is acting as a limited manufacturing partner, just short of an equity holder.
• From a strategic perspective, the Bank of Apple lends only to suppliers that commit to producing for Apple Inc. Thus locking out competitors. (Source)

I think this is an excellent summary, parts of which could be applied to the car industry in the future:

Car contract manufacturers such as Valmet or Magna Steyr may not be able to fulfill future Apple's unit sizes at the moment, but neither could most of Apple's current manufacturers some years ago - that's exactly why Apple enters into pre-purchase agreements for key equipment and provides tooling and cash injections for its suppliers.

In fact, Apple may not even need to change suppliers. Many Apple investors may have glanced over the news that Foxconn has revealed it's in the business of making EVs since 2014.

No link here since it's my own article.

 

[mspohr]

Interesting article on BGR with an interview with Bob Lutz (GM and BMW) about Apple Car:

"Former GM and BMW executive warns Apple: Your car will be a ‘gigantic money pit’"
Choice quote:
"First of all, Apple has no expertise in batteries. They don’t make batteries. The specialized electrochemical companies make batteries and Apple is going to buy batteries like everyone else. And when it comes to actually making cars, there is no reason to assume that Apple, with no experience, will suddenly do a better job than General Motors, Ford, Volkswagen, Toyota or Hyundai. So I think this is going to be a gigantic money pit, but then it doesn’t matter. I mean Apple has an embarrassment of riches, they don’t know where to put the cash anymore. So if they burn 30 or 40 billion dollars in the car business, no one’s going to notice."

"If I were a shareholder I’d be very upset because they’re currently engaged in a very high-margin business and the automobile business, at best, is a very low margin business. And you can’t show me one company in the world that, to date, has made a nickel on electric cars. They are generally money losers and the only reason that everyone is producing them is because they are necessary to meet European fuel economy regulations and U.S. fuel economy regulations. There is absolutely no reason to assume that Apple is going to be financially successful in the electric car business."


Apple Car is a , says former BMW executive | BGR

 

[rolosrevenge]

Apple will hopefully buy lots of Tesla batteries from the Gigafactory, which will be cheaper than anyone else's batteries. If Apple uses Tesla's open patents, batteries and charging standards, they could leverage Tesla's infrastructure to produce EVs much cheaper than anyone else. GM on the other hand, is in a bad position because they can't fully commit to EVs due to legacy technology.

 

[RobStark]

 

[voyager]

 

[tftf]

A good overview on Apple's Titan project here:

Apple Is Building Its Largest Startup Ever

September 28, 2015
What was once discussed within certain technology circles is now in mainstream news. Apple is building a startup focused on designing an electric car. When compared to previous product initiatives, Apple is embarking on its most ambitious project in its history. In recent years, there has been much debate surrounding the factors that have contributed to Apple becoming the most valuable company in the world. There is growing evidence that Apple is confident it still has the keys to success. The startup team Apple is putting together and the corporate values that support such a team will determine Apple's ultimate success in the automobile industry.

http://www.aboveavalon.com/notes/2015/9/28/apple-is-building-its-largest-startup

At the same time, Elon Musk feels the need to engage in trash talk already:

"Q: Apple just hired some of Tesla’s most important engineers. Do you have to worry about a new competitor?

Important engineers? They have hired people we’ve fired. We always jokingly call Apple the “Tesla Graveyard.” If you don’t make it at Tesla, you go work at Apple. I’m not kidding."

All Charged Up in Berlin Handelsblatt Global Edition

So much for Apple and Tesla working together on a car (Musk of course already managed to alienate former partners Toyota and Daimler).

Musk's arrogance towards partners and (future) competitors might very well be his downfall long-term. Apple is not joking around with $200bn in the bank whenever it enters a new sector.

 

[Cosmacelf]

Elon is sounding very defensive. There are rumors of $250k signing bonuses. There aren't a lot of engineers willing to ignore that kind of money...

 

[Johan]

$250k signing bonus with Apple or stock options to stay with Tesla... hmm...

Elon might not be trash talking after all. But yes it comes across defensive.