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Apple: Rumors of EV to Challenge Tesla or Buying Tesla

Discussion in 'TSLA Investor Discussions' started by allz, Feb 14, 2015.

  1. allz

    allz Member

    Sep 8, 2013
    I can imagine how good it is if iCar gets out and Apple partners with Tesla for a charging... super good for TSLA ;)
  2. AlMc

    AlMc 'Senior Moments' member

    Apr 23, 2013
    While it has been discussed before, I, for one, am torn over the possibility of Apple just buying TM. On the one hand we would trade future TSLA appreciation for what would probably be a nice premium over the current stock price and accelerate EV adoption. On the other hand it is *exciting* (OK stressful with the ups ad downs) to see if TM/EM can grow this company, on average, 50% a year for 10 years.
  3. Drax7

    Drax7 Active Member

    May 18, 2013
    Tim Cook at apple is expert at supply chain management, and the last thing in the world he will do is manufacture a car.
    They do not even assemble their own phones.

    However, the giant iPad inside the car is their domain, and that they will reproduce and offer one to car manufacturers
    or the consumer directly.
  4. FredTMC

    FredTMC Model S VIN #4925

    Dec 26, 2012
    Orange County CA
    #4 FredTMC, Feb 14, 2015
    Last edited: Feb 14, 2015
    Thx. No way APPLE buys TSLA (IMO). Too expensive for Apple. Clearly Apple is lining up to Compete... I love Apple BTW. I think they'll make a great iCar or they won't release it.

    In the spirit of "pirates of silicon valley", what I'd really like to see is Google do a minority investment in Tesla (similar to their investment in SpaceX).

    Bottom line: a minority investment in TSLA by Google could instantly increase the value of TSLA to $250-$300 per share. This is very similar to the Microsoft investment in FB (yes. that was pre-IPO)

    yes, AIMc, this development is very umm "exciting".

    On topic, for short term stock price:

    It's 'tesla competition' camp vs. 'EV adoption' effect. Here we go...
  5. SBenson

    SBenson Active Member

    May 22, 2014
  6. ecarfan

    ecarfan Well-Known Member

    Sep 21, 2013
    San Mateo, CA
    There are other topics where this same issue (how much of a competitor would Apple be to Tesla) is being discussed intensely.
  7. LargeHamCollider

    LargeHamCollider Battery cells != scalable

    Jan 10, 2015
    United States
    Need more information before I can determine whether or not this warrants serious concern, with current info my concernometer registers about a 2/10 (+/-2). We need to know:

    1. What kind of car? (Minivan... Srsly?) or product? What really is apple working on...
    2. Timeline?
    3. Price
    4. Level of commitment
    5. Other partners?
    6. Lots of other stuff I haven't thought of
  8. jerry33

    jerry33 S85 - VIN:P05130 - 3/2/13

    Mar 8, 2012
    1. The headline writers are using Tesla to get clicks.

    2. There is plenty of room for both cars. It's said that the Apple car be a minivan, so not too many Tesla owners will trade in their car or cancel their X reservation for one of those. I truly doubt that Tim Cook can come up with a killer car. I expect something that appears as if it's been designed by a committee, similar to the Apple Sports Watch that can't be worn in the rain. Alternatively, it could be a Model S clone, in which case who would purchase a knock-off when they can get the real deal. And even if none of my speculations are true, unless Apple buys into Tesla's Supercharger network it will be some time before it's actually a useful car.

    3. Apple's move is probably supposed to be competition with Google rather than with Tesla.

    So I wouldn't worry about Apple.
  9. jhm

    jhm Well-Known Member

    May 23, 2014
    Atlanta, GA
  10. SteveG3

    SteveG3 Active Member

    Sep 21, 2012
    If Apple is working on a car it is very unlikely to impact Tesla's growth opportunity for a very long time (15 years or more from now if ever). Tesla has multiple moats around their growth opportunity.

    Consider this moat:

    There are two scenarios in Apple developing a vehicle,

    1) Take advantage of Tesla's offering of their intellectual property
    2) Engineer their own solutions without use of Tesla's technology

    It's worth remembering Tesla did not relinquish their patents... they just said anyone is free to use them in good faith. I do not think Tesla would consider another vehicle maker creating long range EVs with a separate walled off SuperCharger-like network as being in good faith. Thus, I think if Apple makes a move to EVs using Tesla's patented technology, scenario 1, Apple would join in on the SuperCharger network. It would take relatively small amounts of money from Apple's perspective to make the network far more dense, which would make Tesla's vehicles more attractive to consumers.

    If Apple were to choose not to use Tesla's patents, my gut estimate of a best case scenario of them developing as good a technology as Tesla's on their own without stepping over any of Tesla's patents would be about 2020. So, perhaps they'd be ready to bring their first vehicles to market in about 2023 if they go with scenario 2. Maybe at the start they'd have a few hundred thousand vehicles produced in 2023, and try to grow from there.

    Here's another moat:

    Staggering amounts of capital to transition to EVs... even for Apple.

    As an extreme example I give less than a 0.1% chance of happening, if Apple were to use all of it's current cash on hand (~$180 billion) to begin building auto factories and Gigafactories starting in ~2019 (assuming they get an initial car on the market in about 2018 to prove to themselves they can go with this "all in" strategy) all $180 billion or so would be roughly enough cash to build auto and Gigafactories suitable to supply 10% of the 100 million vehicle market when those factories might be at full production capacity about 4 years later (assuming each GF cost about $5 billion, each Fremont-like 500K annual vehicle capacity auto plant about $4 billion).

    If Apple had 10% of the global vehicle market in 2023, Tesla would still have 90% of the market to sell to. Moreover, that was an extreme that simply wont happen, as

    -Apple is a corporation owned by stock holders. I think it is enormously improbable their management, which ultimately has to answer to shareholders, would make such a massive bet as to invest $180 billion (all of their cash) in an industry they would at that point have one year of experience and 0.2% market share in.

    -This would mean building about 20 Gigafactories and 20 auto plants in the span of 3-4 years. I find it extremely improbable such a massive undertaking could be pulled off by anyone, let alone a company whose never built an auto plant or a battery factory.

    So, even in an extremely aggressive scenario which is tremendously improbable to be embarked on (and very improbable not to be a mess if somehow given the green light) Apple would have 10% market share, and Tesla 90% of the market to try to grow into (all this assuming Apple's car was more attractive than Tesla's to all consumers, thus Apple taking 10% share before anyone considers a Tesla).


    I do think it's worth considering that a slower more realistic size move into autos by Apple could eventually effect Tesla's growth trajectory, perhaps as soon as 15 years from now. If Apple were to get up to a few million vehicles per year by 2025 (and be making strong margins on their new business), this would push the other automakers to transition to EVs sooner, and might draw in other new players with rarified levels of cash on hand like Samsung, Google, or even some oil companies. So, perhaps, this could lead to something like 30-60% of new vehicles being EVs around 2030. Elon would love it, but with that kind of acceleration of the transition to EVs might lower the ceiling of how much market share Tesla could grow to in the 2030s and 2040s.

    One last point- Apple could try to short cut the process of building infrastructure by buying existing auto plants, or another automaker or two, or three... That could be more efficient than building plants from scratch, but it would bring to Apple some of the problem the incumbent automakers have... creating losses in the outgoing ICE business, and existing investments in ICE infrastructure, engineering talent, and a workforce trained in ICE. I think the biggest realistic kind of move Apple might make could get them to ~3 million vehicles per year around 2025, or 3% of the market.
  11. cdub

    cdub Future Model 3 owner / Current original Leaf owner

    Oct 7, 2014
    Glendale, CA
    Concerned? No. Apple? Seriously. I would never ever buy a car from Apple. Then again I won't ever buy anything Apple again but that's another story.

    They'd make you buy Apps to use the road and every car would play the new U2 album constantly. Plus you would only be able to charge the car with Apple proprietary "magical" charging system. And not to mention the navigation system would be horrible.
  12. jhm

    jhm Well-Known Member

    May 23, 2014
    Atlanta, GA
    Steve, you raise good points. I don't think Apple or any established corporation really wants to run with Tesla. But it would be wonderful to see some new entrants into the EV maket who are ready to follow Tesla's lead.

    Let's turn the question around. What could Tesla do to encourage new entrants to follow their lead and enrich the Tesla ecosystem?

    They've opened patents. They've expressed a desire to share the Supercharger network. I think they would be quite willing to supply battery packs to a company that is fully dedicated to producing Tesla grade vehicles. I also would expect that Tesla could be willing to sell such products at their own stores and service them at service centers. (This may even circumvent franchise laws for them.) I think Tesla would be willing to license software for a Tesla compatible vehicle and provide software as a service. What I think is missing is that the new entrant would need to design their own models and manufacture or contract to manufacture them. Now maybe new entrant can bring other expertise to enhance the Tesla ecosystem, but I think the minimum requirements for an entrant that really wants to borrow as much strenth from Tesla as possible is relatively low.

    We know that there is a kind of crowd sourcing group of people working together to develop the hyperloop. A lot of talented people are basically volunteering offhours to collaborate on this. Suppose another group forms to collaborate on a Tesla grade truck. This group could attract willing talent from around the world and workout a kickass design for a truck. If the design has real promise, I bet Musk would put his own money into it to see that this collaborative start up tests it out and gets it into production. No doubt Tesla shareholders would benefit from this and many of us would want to invest in it as well.

    What Tesla needs is a really awesome start up incubator. The world needs more EV entrepreneurs.
  13. drinkerofkoolaid

    drinkerofkoolaid Active Member

    Nov 3, 2012
    #13 drinkerofkoolaid, Feb 14, 2015
    Last edited: Feb 14, 2015
    Seems far more likely Apple is developing new battery/charging technology that will be used in the Model X and Model 3. The comments about "staggering amounts of CAPEX, combined with the acknowledgements that Musk has been spotted at the Apple campus, look like signs that Apple plans to PARTNER with Tesla.

    * It might make Apple look very bad if Apple declared war on Tesla.
    * I'm thinking iOS in the car might have something to do with face tracking (keeping your eyes on the road) and sensors in the steering wheel.
  14. rolosrevenge

    rolosrevenge Dr. EVS

    Feb 7, 2009
    The apple car will be awesome! It will only have one, multipurpose button, which allows you to accelerate, brake, and steer...
  15. TEG

    TEG TMC Moderator

    Aug 20, 2006
    Related other thread:
    Apple developing their own car?

    - - - Updated - - -

    If you press the brake and accelerator at the same time it will take a snapshot of the car in front of you.
    If you hold down on the brake too long then the car shuts off.
    No need to have a key... It will read your thumbprint to open and start the car!
  16. ajax

    ajax Member

    Mar 12, 2014
    Columbia, MO

    Are you referring to Elon's visit a year ago or was there a more recent one? That would be big news, but I can't find any sources.
  17. yesla

    yesla Member

    Oct 16, 2014
    #17 yesla, Feb 14, 2015
    Last edited: Feb 14, 2015

    Agreed, Apple is targeting auto for their new platform and so is Google. Google has their autopilot project. would it get baked into Android Auto for cars with sensors? Apple just needs to catch up with features. Nothing surprising really... Tesla news is mostly tabloid hype now. go figure.

    At least I can come here to catch up on Tesla news.
  18. sundaymorning

    sundaymorning Active Member

    Jul 26, 2013
    Orange County
    #18 sundaymorning, Feb 15, 2015
    Last edited: Feb 15, 2015
    The media likes to call Tesla hype, yet reports of a future Apple product that has no merit to show, except a comment from its engineer that "we have something that'll give Tesla a run for its money." How long has the Apple iTV been in the conversation? Years.... yet a highly sophisticated tech such as a self driving car is supposedly arriving before the rumored iTV?

    GM also has a future 2017 Tesla M3 killer, the Bolt is underway and will reportedly have 200 mile of range (up from 40 miles of range in the Volt). While Audi has a secret lab working on its Etron project and will reportedly have 200 miles of range. The only similarity that these companies have with Tesla, is that at the very least, are all thinking of a 200 mile range vehicle. What separates Tesla from the rest of the flock is that in the short term, they have the S, and very soon X to show as a logical sequential step to the 3, going from the Volt to the 3, iPhones to the 3, is highly speculating, especially when everyone lacks a gigafactory. Google has the tech for self driving cars, but there are reasons for not entering the manufacturing process of said vehicle, because it is not that easy..... as a Tesla investor, I can attest to how difficult and monumental a task this is, even with the S and X in existence.
  19. mejojo

    mejojo Member

    Aug 4, 2014
    Santa Paula, CA
    The other item of note is that these 200 mile vehicles are minis, not luxury sedan or crossover vehicles, and have minimal storage space. Their size also necessarily limits their max range potential.

    This means that although their potential market increases over their current offerings, they still bang up against the limits of the size of the vehicle and do not compete with Tesla S or X.
  20. Johann Koeber

    Johann Koeber Member

    May 1, 2012
    Schweinfurt, Germany
    Add to that the fact that Tesla enables long distance travel through the Superchargers. Nothing like it in sight from other companies. Nor have we heard about any companies licensing or otherwise enabling their customers to use the SCs. Tesla is putting a lot of effort and money to build this moat. In Germany, the middle of Europa and much of the continental USA they are almost done; fillig the holes.

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