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Apple: Rumors of EV to Challenge Tesla or Buying Tesla

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#121
It's kind of unbelievable how misinformed a few posters here are about apple. If you're just complete anti-fanboys why even post in this thread? Some of these comments are completely non-constructive. Talking about how Apple has never innovated anything and the iPhone was derivative and changed nothing. Come on.

But then I never posted in this thread and my comment was moved here just because it was a response to something else so I guess I should just unsubscribe from the thread.

My take: It probably won't happen, but it would absolutely be good for Tesla if it did. And good for Apple, assuming they want a new industry. Which I think would be too large of a departure, which is why I think it won't happen.
 
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#123
woof said:
Yes! This is what I'm talking about! See how Apple can benefit Tesla? They just nailed that design...Perfect. Wouldn't change a thing:

View attachment 72661
Features Of The Apple Car | The Onion - America's Finest News Source

And what a lovely gesture that is.
Click to expand...

That Apple car is orginally a VW design, called the Nils.
Volkswagen-Nils-Electric-Car-Concept-290x198.jpg
 
#124
#126
woof said:
As a shareholder, you are probably correct that small higher margin cars are better for the share price...but as a shareholder you should be aware that pursuing maximum value is NOT Tesla Motors vision or mission. It's not about the money or share price (as much as any public company can do that). Tesla wants to go for the low end as that is the best way to accomplish their mission. The "secret plan" was to start high and move low, making enough money to move to the next phase.
Click to expand...

Given that Elon said in the last quarterly conference call that he thought Tesla would have a market cap of 700 Billion in 10 years (a figure which even I find absurd), I don't think it's fair to say the company isn't pursuing maximum value. Going for maximum value and achieving the goal of pushing the car industry towards EVs are not mutually exclusive paths.


They seem to be able to do that just fine on their own right now, but probably can do it faster with outside help. Tesla has done everything possible to get others to see the light...giving away patents, selling drive trains and batteries, opening up the Supercharger network to those who will help fund it and can use it effectively...but it hasn't had the effect they anticipated. No one else wants to play. My speculation above is one way Apple can help with the mission and both get value out of the deal.
Click to expand...

I don't see how Tesla could have expected other companies to use their IP on a large scale. Elon said Tesla wouldn't enforce patents, but from a corporate General Counsel's perspective, that could change in the future and no GC is going to sign off on using IP that puts his company at even the slightest risk of future litigation. Where powertrains and batteries are concerned, Tesla is supply constrained. Even if Toyota and Honda wanted to buy battery packs from Tesla, I don't think Tesla has extras to sell them right now, because they all go to Model S, and soon to Model X too.

My observation all along is that Tesla's goal was to achieve electrification of car fleets by proving to other companies that an EV could be desirable and profitable, and therefore a product segment worth entering.


woof said:
Look, I'm not trying to argue Apple vs Samsung or Dell. I agree with you completely about how Apple does it's thing, and how analysts who insist Apple sell a low end model phone or netbook are just dead wrong, and that's not how Apple roles.

However, as far as Tesla goes, they've stated quite early (before they went public) what they want to do and how they intend to do it, and the low end is the final stage:
Source: The Secret Tesla Motors Master Plan (just between you and me) | Tesla Motors

With the Models S and X, Tesla was trying for step 2, but got stuck at step 1.5 as neither are "affordable" by most measures. With the P85D they went backwards, so it's possible the plan is not being followed that closely anymore. But with the Model 3 finally comes step 2, and whatever comes after that will presumably step 3. Those steps are all "down market" with less profit. It's a strategy for growth, not profit margin. Perhaps the growth will drive the value faster than the erosion of profit...that's often the way of these things.
Click to expand...

This is a different an interesting perspective on the secret plan. I always saw Model S as Step 2 and Model X as Step 2.5, but its a good point that the Model S is still very expensive.

My reasoning with Model S being a Step 2 vehicle is this: The Tesla Roadster is a car of limited utility. If someone with a family and 2 cars in the household, say a Honda Accord of some kind and a compact SUV like a CR-V, wanted to buy a Roadster, the Roadster would not be able to replace either of their cars without some serious compromises. The Roadster only seats 2 and can't carry a lot of stuff. The Roadster also isn't great for long-distance travel outside of its range, because it lacks Supercharging capability. In this case, the Roadster is a 3rd car. A 30k Accord, 25k CR-V, and 109k Roadster (+ cost of options - tax credits) = total fleet cost of 164k (give or take a few k for options and tax credits).

Model S, on the other hand, can replace an existing car for most people. I think most households that have an Accord and a CR-V would do quite well with a Model S and a CR-V, or Model S and Accord. In this way, the Model S is much more affordable than the Roadster. If the Model S replaces the Accord total fleet cost drops to 25k CR-V, 92k Model S (configured as: metallic blue, pano roof, 85kwh battery, RWD, tech pkg, dual chargers, wall connector, winter pkg) , total cost of 117k (minus 7.5k federal tax credit). That's still a lot of money, but substantially more affordable than 2 ICEs + a Roadster.

The reason I see Model 3 as the Step 3 vehicle, is because the target price of 35k (and this is not including any tax incentives) makes it competitive against an Accord or Camry when one takes into account cost of fuel over the years of ownership. The most common middle-range 4-cylinder Accord EX sedan with CVT is already pushing 26k.

- - - Updated - - -

FANGO said:
It's kind of unbelievable how misinformed a few posters here are about apple. If you're just complete anti-fanboys why even post in this thread? Some of these comments are completely non-constructive. Talking about how Apple has never innovated anything and the iPhone was derivative and changed nothing. Come on.
Click to expand...

I think a lot of people say Apple didn't innovate anything because individual features (like touch screen) were available in other products first. My general response to this is that Apple's innovation is not in individual features, but in putting the features together in a uniquely cohesive way that makes the final product easier and better to use for the customer.
 
#129
Didn't see this mentioned yet, but an interesting indicator I read and screen capped from the flurry of articles is Eddy Cue's board status with Ferrari. He joined the Ferrari board in 2012, and the article indicates that if Apple were seriously pursuing their own car, he would have to step down.

e6b0512627e3fdb4c7c7c585de4a2a02.jpg
 
#130
OK, what the hell -- this is a real thing?

Revealed: The experts Apple hired to build an electric car | 9to5Mac

My take: Apple is 10 years behind Tesla, has no Gigafactory, no US manufacturing capability, no heavy industrial manufacturing talent or experience -- I see this as WAY, WAY outside Apple's core competencies and it smacks of desperation. This would make me very nervous to be an Apple shareholder -- they are looking so hard for new product ideas that they are extending too far and this could be a monumental waste of cash.

From a TSLA perspective, this is just more validation of Tesla's brilliance in diving headlong into an outdated car industry in need of innovation, and leading the way for years to come.

Apple is a mature company that does not have much innovation left in the tank, I think. Tesla is just the opposite.

My 2 cents.
 
#132
Apple has $178B in cash. Most companies do acquisitions under shareholder pressure and wind up with little to show for it. Apple has resisted this and I applaud them for it. $178B means Apple needs to look at iPhone sized markets. If you look at Apple's revenue the problem becomes apparent. Revenue is dominated by the iPhone. Apple is no longer a computer company. They are a phone company. While they continue to grow, many of their growth areas have a small impact. This is why Apple has tried hard to find a way to redefine the TV market since the TV market is large enough to be interesting. The issue there is how to generate a high margin product.

At first look, Apple getting into automobiles seems crazy. It would certainly be a bold move with a lot of risk. If successful, however, it opens up a market that is huge with 2014 global car sales estimated by one source at 82.84M vehicles.

One important point is to know who your enemies are. The news reports talk about Apple going after Tesla. That would be a mistake. GM, Ford, BMW, Nissan, etc. are the enemies. A better move would be to partner with Tesla on the Supercharger rollout and accelerate it. That would change the range and convenience perception overnight. Imagine an extra $1B thrown at Superchargers. That would be small money for Apple but transformational for EV transportation. If Apple killed Tesla that would hurt perception and slow Apple. Apple should be so lucky as to have it wind up with Apple, Google and Tesla being the big three car companies. Fight each other if that happens but for now realize it is a huge market and you are better off working together to beat the old guard.

I doubt Cue has to leave Ferrari unless Ferrari is working on an all electric car. I doubt Apple will be doing a sports car to compete with Ferrari.

Apple is poaching people from A123. This is the company that had issues and caused Fisker so many problems. I suspect those days are past. I was surprised to see the specs of their Prismatic Pouch Amp20 battery - Over 2,400 W/kg and 4,500 W/L.
 
#134
Hi everyone, first post, great forum and posts thus far on the topic at hand...

I'm not convinced AAPL would want the high end business exclusively. Their best markets consist of "accessible luxury" priced items. I don't think they could introduce an entirely new product category (for them) without an option that ~20% or more of US households could reasonably afford without risking backlash. Perhaps the split then goes the other way? Tesla remains the high-end brand (with Apple design/branding creeping in over time) and the Gen3 car ends up being launched/branded and Apple product? Also, it could be that they just keep the Tesla brand in tact like the Beats acquisition and develop an Apple branded car line well into the future...

Another aspect is the debate over the margins and profitability of the auto industry for a company like Apple. I'm not convinced that this precludes their entry into the auto market. I think they are first and foremost a product company. Tesla is rather similar in this regard. I think that when you add on the social purpose of vehicle electrification, along with US-based manufacturing, Mr. Cook could be interested. It's also clear that both companies have immense interest in battery technology, combining efforts here might make sense... Lots of people are claiming Apple won't do this because it is unlikely to move the revenue/profit needle much, but I think they will move into the auto market if and only if they have a product idea that they are thrilled with.

On the other hand, I don't think any acquisition deal is likely to go through. I'm in the camp that Elon's bizarre market cap/growth commentary on the CC was a calculated and aggressive statement about the valuation of the company intended for potential suitors. There is also a risk of talent fleeing the company after a takeover, although if you truly believe in the Tesla mission there isn't a better alternative.

Also, Apple has been extremely conservative in expanding (engineering staff in particular) despite their recent huge financial success. The truth is that they are barely covering their core engineering (and, critically, design) needs as it is, and I doubt they would want to add another huge project in the short term without some serious talent expansion.
 
#135
FluxCap said:
OK, what the hell -- this is a real thing?

Revealed: The experts Apple hired to build an electric car | 9to5Mac

My take: Apple is 10 years behind Tesla, has no Gigafactory, no US manufacturing capability, no heavy industrial manufacturing talent or experience -- I see this as WAY, WAY outside Apple's core competencies and it smacks of desperation. This would make me very nervous to be an Apple shareholder -- they are looking so hard for new product ideas that they are extending too far and this could be a monumental waste of cash.

From a TSLA perspective, this is just more validation of Tesla's brilliance in diving headlong into an outdated car industry in need of innovation, and leading the way for years to come.

Apple is a mature company that does not have much innovation left in the tank, I think. Tesla is just the opposite.

My 2 cents.
Click to expand...

If that article is accurate, Apple is researching more than just CarPlay upgrades and automated driving. A company doesn't need mechanical, powertrain, and battery engineers for multimedia software and sensor processing.


SR22pilot said:
Apple has $178B in cash. Most companies do acquisitions under shareholder pressure and wind up with little to show for it. Apple has resisted this and I applaud them for it. $178B means Apple needs to look at iPhone sized markets. If you look at Apple's revenue the problem becomes apparent. Revenue is dominated by the iPhone. Apple is no longer a computer company. They are a phone company. While they continue to grow, many of their growth areas have a small impact. This is why Apple has tried hard to find a way to redefine the TV market since the TV market is large enough to be interesting. The issue there is how to generate a high margin product.

At first look, Apple getting into automobiles seems crazy. It would certainly be a bold move with a lot of risk. If successful, however, it opens up a market that is huge with 2014 global car sales estimated by one source at 82.84M vehicles.

One important point is to know who your enemies are. The news reports talk about Apple going after Tesla. That would be a mistake. GM, Ford, BMW, Nissan, etc. are the enemies. A better move would be to partner with Tesla on the Supercharger rollout and accelerate it. That would change the range and convenience perception overnight. Imagine an extra $1B thrown at Superchargers. That would be small money for Apple but transformational for EV transportation. If Apple killed Tesla that would hurt perception and slow Apple. Apple should be so lucky as to have it wind up with Apple, Google and Tesla being the big three car companies. Fight each other if that happens but for now realize it is a huge market and you are better off working together to beat the old guard.

I doubt Cue has to leave Ferrari unless Ferrari is working on an all electric car. I doubt Apple will be doing a sports car to compete with Ferrari.

Apple is poaching people from A123. This is the company that had issues and caused Fisker so many problems. I suspect those days are past. I was surprised to see the specs of their Prismatic Pouch Amp20 battery - Over 2,400 W/kg and 4,500 W/L.
Click to expand...

Even if Apple wanted to go after Tesla, they are likely 4-5 years away from releasing any new car product. Many of the hires from the 9to5Mac article look fairly recent, and cars take a much longer time to develop than a phone. The sheer complexity of factors that must be considered when designing a car, the regulatory red tape, and the manufacturing difficulty would be a massive jump for Apple. The move from iPod to iPhone is a small step in comparison to the move from an iPhone to a hypothetical Apple Car.

I don't want to see Apple buy Tesla, but I would not be opposed to Apple entering the EV market. The car market is so large that there is plenty of room for Apple.

- - - Updated - - -

Deleted double post
 
#136
FluxCap said:
OK, what the hell -- this is a real thing?

Revealed: The experts Apple hired to build an electric car | 9to5Mac

My take: Apple is 10 years behind Tesla, has no Gigafactory, no US manufacturing capability, no heavy industrial manufacturing talent or experience -- I see this as WAY, WAY outside Apple's core competencies and it smacks of desperation. This would make me very nervous to be an Apple shareholder -- they are looking so hard for new product ideas that they are extending too far and this could be a monumental waste of cash.
Click to expand...

It is appears that Apple is, at least, serious about developing some sort of transportation solution. There are many people inside Apple that have wanted to do this, and in some cases, for quite some time. Of course, we don't know what they are really looking at building yet and the list of hires do not yet include large scale manufacturing people it appears.

I don't see this as desperation. They don't need to do this. They want to do this. Further, they have more cash the GDP of many countries. They can hire whatever they need, they can build out whatever they want. After all, Tesla started with near nothing and went IPO and raised money for Apple's pocket change. If Tesla can turn, say, $5 billion into a market cap of $500 billion and that is the market opportunity, why can't Apple invest $20 billion and double their market cap in the same time? Tesla was a piss-ant little company not all that long ago with zero large scale manufacturing experience, right around when Apple had zero marketshare in phones.

I agree this is a long term thing. At this point, we don't even know if Apple want to make Segways, commercial vans, long haul trucks, or the next BMW M3 BEV. But certainly, this is not the Apple we think we know and all bets are off. There is no "Apple won't do that" or "Apple can't do that" in this conversation at this point.
 
#138
I agree with all the thoughtful posters here who have pointed out that Apple is first and foremost about HIGH MARGINS more than anything else. This is why they have 180B in cash. The way they have done it is excellent reliability/quality and design and their "full package" being that much better than the competition, so much better in fact that people will pay that extra 20% which is 100% profit for Apple.

Now, there are two auto manufacturers with those kinds of margins: Porsche and Tesla. Which one is a better match for Apple to partner with?
 
#139
Just to lend some credence to the rumors about Apple's automotive aspirations, the following is article about A123 suing Apple for poaching it's employees (appeares on the Fidelity news feed):

Apple Sued for Poaching A123 Employees


DOW JONES & COMPANY, INC. 2:35 AM ET 2/19/2015
SymbolLastPrice Change
AAPL128.76
light_up.gif
+0.045 (+0.03%)
DDAIF95.57
light_down.gif
+0.14 (+0.15%)
TSLA209.721
light_down.gif
+5.261 (+2.57%)
QUOTES AS OF 12:20:58 PM ET 02/19/2015

A123 Systems, a lithium-ion battery maker for electric cars and other business sectors, is suing Apple Inc.(AAPL) for what it alleges is an "aggressive campaign to poach employees."

The complaint, filed in Massachusetts earlier this week, names five employees that have either defected to Apple(AAPL) or appear to be in the process recruiting others to join Apple(AAPL). A123 believes Apple(AAPL) aims to build a competing battery business, partially relying on expertise from former A123 employees to help it succeed.

Apple (AAPL) declined to comment on the suit. A123 officials couldn't be reached for comment.

Backed by a $250 million government grant, A123 was once a promising player in electric vehicles, but filed for bankruptcy protection in 2012 amid slower-than-expected battery advances, high costs of development and slow consumer acceptance of electric cars.

The battery maker says Apple's(AAPL) efforts threaten A123's own business and leave it scrambling for qualified replacements, efforts that leave the company vulnerable following its restructuring. Apple(AAPL) has also hired auto industry talent from Daimler AG's(DDAIF) Mercedes-Benz unit and from Tesla Motors Inc.(TSLA)

The suit comes as Apple(AAPL) gears up to challenge Tesla, General Motors Co. and other auto makers in developing an electric vehicle. The Cupertino, Calif., company has several hundred employees working secretly on a project code-named "Titan" that included initial design work on a vehicle that resembles a minivan, The Wall Street Journal reported Friday.

A123 has operations in Germany, Michigan, Massachusetts and China and is now a subsidiary of China'sWanxiang Group
Click to expand...
 
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