WSJ: Apple will ship a BEV in 2019, will triple the 600-person team on Project Titan

[wdolson]

Why 11 years? A new car model takes about 4-7 years to put into production (depending if it's a derivative model or something completely new, hence the wide range).

Apple started this project back in 2013 (exploration phase) with more people added in 2014 (first poachings, many experts added, see LinkedIn) and now the project is apparently again tripling to close to 2000 people.

It's feasible to create a car within this timeframe, especially given the vast resources Apple has worldwide (both in terms of existing suppliers and financial resources). They could also license a car (BMW i3 rumors) as a technology platform to accelerate the first model launch.

As for contract vs vertically integrated manufacturing, I already discussed this topic here in detail:

Apple developing their own car? - Page 14

I'm much more skeptical of Atieva's and FF's (Faraday Future) EV timeplans, they want to launch their EVs well before Apple's rumored 2019-2020 timeline.

Finally, Apple can and will poach more senior personnel experts thanks to their resources, this will slow down the existing EV/battery competition (as A123 and Tesla already complained about publicly).

I think Tesla investors need to face the fact that the entire PHEV and EV car sector will be very crowded across all models and price ranges by 2018-2020.

In my first post I didn't predict Apple would take 11 years. I said Apple is where Tesla was 11 years ago. I also said that I thought they would take 6-8 years to get to production, which is the high end of the range you quoted for car development. Considering Apple has never built a car and they are intending to produce a very advanced car, I would think the high end of the range is more reasonable. Rather than 2019, I think around 2021 is more likely for Apple, not 2026. I think Tesla will probably have the upper end of the EV market to themselves for the rest of this decade, but I agree the segment will get very crowded, but I don't think it will happen until the early 2020s.

 

[TEG]

Tesla started out on a 'shoestring' budget. Apple has nearly unlimited resources.
Tesla started with a bunch of valley software engineers that had to learn about the car industry. Apple already has 'absorbed' a bunch of talent that has Tesla (and other auto industry) experience now.
So, in that way it should be easier for Apple to make something more quickly.
On the other hand, I suspect Apple wants the first release (1.0) to be fairly polished and up to their standards.
Tesla, at first, had some 'teething pains' getting some rough first vehicles out before they got quality under control.
So, Apple could probably get ~something~ ready in a hurry, but may sit on it for a long time as they tweak and tweak to make sure everything is close to perfect before they really release.

(Just IMHO)

 

[drinkerofkoolaid]

Okay, if analysts and bloggers can start rumors about a product that might be released in 2019, I'll be the first to post about the TARDIS (Time And Relative Dimensions In Space) machine that a source told me Apple might release in 2030.

 

[tftf]

Okay, if analysts and bloggers can start rumors about a product that might be released in 2019.

It's not just wild speculation by bloggers or analysts, the FT and WSJ have good sources when they use quotes like "people familiar with the matter". There have now been several articles (AppleInsider, 9to5Mac, FT, Guardian, WSJ) with independent sources talking about an Apple car (or at least a personal transport-related project or even ecosystem).

Furthermore, senior battery and car personnel doesn't leave their current employers for Apple on a whim, some even came from Europe. The changes in their LinkedIn profiles since 2013-2014 (citing Apple as their new employer) have probably been the best source that something way beyond CarPlay 2.0 is in the works in Cupertino.

PS: The Apple TV set rumor on the other hand was promoted by Apple analysts with a mediocre track record (especially Gene G. and Trip C.). They kept talking about an Apple TV even as Apple was finishing their smart watch.
Speaking of Apple analysts, Mr. Kuo is the one to follow. Not the other clowns with very poor track records (but likely good connections to U.S. media and financial networks, that's why they are probably quoted /interviewed so often). Speaking of media and Apple news/rumors, Mark Gurman is the person to follow.

 

[The Blue Owl]

It's not just wild specualtion, the FT and WSJ have good sources when they use quotes like "people familiar with the matter". There have now been several articles (AppleInsider, 9to5Mac, FT, Guardian, WSJ) with independent sources talking about an Apple car (or at least a personal transport-related project or ecosystem).

Furthermore, senior battery and car personnel doesn't leave their current employers for Apple on a whim. The changes in LinkedIn profiles since 2013-2014 (citing Apple as their new employer) have probably been the best source that something way beyond CarPlay 2.0 is in the works in Cupertino.

I'm actually one who doesn't doubt Apple's capability to deliver a great car once they decide they want to, even if it takes a while. What I don't get is why I should be worried for Tesla instead of the ICE manufacturers. I mean, if (when) the Apple tsunami hits, I'd rather be Tesla than BMW.

But that's just me. (Nah, it's not.)

The one concern I share, mind you, is the magnitude of the net brain drain from Tesla to Apple, if any. I don't think we know enough about that to be worried. Yet.

 

[RobStark]

Tesla was off the radar for the first 4 years of actual car production.

Apple can't have George Clooney bitching about his iCar always "in the shop" shortly after release with software bugs.

Apple can't make less than 1000 cars the first year. It would be ridiculed to no end.

Apple can't sell its car direct in stores in States where Tesla has been grandfathered in.

Selling designed in CA made in China in a product you can die in is a much harder sell.

And I really doubt they can build or subcontract a large BEV manufacturing infrastructure without the press getting wind.

We are getting wind of potential release dates.

The CEO of Mercedes is on record saying MB will not become the Foxconn of the automobile industry for Apple.

I suspect other automotive CEOs outside of China feel the same way.

 

[drinkerofkoolaid]

It's not just wild speculation by bloggers or analysts, the FT and WSJ have good sources when they use quotes like "people familiar with the matter". There have now been several articles (AppleInsider, 9to5Mac, FT, Guardian, WSJ) with independent sources talking about an Apple car (or at least a personal transport-related project or even ecosystem).

Furthermore, senior battery and car personnel doesn't leave their current employers for Apple on a whim, some even came from Europe. The changes in their LinkedIn profiles since 2013-2014 (citing Apple as their new employer) have probably been the best source that something way beyond CarPlay 2.0 is in the works in Cupertino.

PS: The Apple TV set rumor on the other hand was promoted by Apple analysts with a mediocre track record (especially Gene G. and Trip C.). They kept talking about an Apple TV even as Apple was finishing their smart watch.
Speaking of Apple analysts, Mr. Kuo is the one to follow. Not the other clowns with very poor track records (but likely good connections to U.S. media and financial networks, that's why they are probably quoted /interviewed so often). Speaking of media and Apple news/rumors, Mark Gurman is the person to follow.

"People familiar with the matter" have been giving incorrect and occasionally illogical information to analysts about Apple products and Apple's supply chain since 2008. I guess the WSJ simply hit a bad streak when they reported on every "person familiar with the matter" as a credible source. All it takes is one random person in China, India, or somewhere in the region to send a message to a news agency, for a rumor to start.

Celebrity analysts such as Kuo are about as useful as a magic 8 ball.

 

[Stoneymonster]

Tesla was off the radar for the first 4 years of actual car production.

Apple can't have George Clooney bitching about his iCar always "in the shop" shortly after release with software bugs.

Apple can't make less than 1000 cars the first year. It would be ridiculed to no end.

Apple can't sell its car direct in stores in States where Tesla has been grandfathered in.

Selling designed in CA made in China in a product you can die in is a much harder sell.

And I really doubt they can build or subcontract a large BEV manufacturing infrastructure without the press getting wind.

We are getting wind of potential release dates.

The CEO of Mercedes is on record saying MB will not become the Foxconn of the automobile industry for Apple.

I suspect other automotive CEOs outside of China feel the same way.

I hear VW is looking for new opportunities....

 

[wdolson]

Apple has poached some Tesla employees, but Tesla has also poached some Apple employees. According to the Business Insider 80 Apple employees state Tesla in their experience, though 50 of those as interns at Tesla and 150 current Tesla employees have Apple on their resumes too.

http://www.businessinsider.com/appl...production-of-tesla-vehicles-2015-9?r=UK&IR=T

LinkedIn isn't definitive though. There are also rumors out there of Apple wanting to buy Tesla, but I strongly doubt Elon Musk would allow it as long as Tesla is viable on its own. He almost sold Tesla to Google, but that was when Tesla was on the ropes. Tesla isn't profitable yet, but they are much more comfortable than they were in early 2013. Tesla is not profitable right now because they are making huge capital expenditures with the supercharger building and the Gigafactory.

Elon has indicated that based on his previous experiences with Zip2 and Paypal, he will not sell a company if it's viable on its own.

 

[SR22pilot]

I just hope Apple and Google understand who the enemy is. Tesla can grow 20X and still only be 1% of the world car market. The enemies are Ford, GM, BMW...My dream is a Supercharger network named TAG (Tesla, Apple, Google). Imagine if Tesla was joined by Apple and Google with each of those putting $1B into Supercharger deployment. Ok, waking up now, but... a nice dream.

 

[tftf]

Celebrity analysts such as Kuo are about as useful as a magic 8 ball.

If so, name me an AAPL analyst with a better track record in recent years than Kuo - or a journalist/blogger with a better track record than Gurman.

Only the old ThinkSecret website comes to mind before it was forced to shut down because of Apple's pressure a long time ago.

Also, the FT and WSJ have been spot on in most cases in high-profile Apple articles (you have to separate between them quoting reports by sell-side analysts with a poor track record or quoting their own sources, there's a big difference).

I look forward to your sources and/or personal prediction on a potential Apple car or personal transportation solution, I'm eager to learn more since you dismissed the sources I listed.

PS: Of course, Kuo may have a harder time covering the car project initially since he was focused on Apple's CE supply chain - unless Foxconn or other Asian contract manufacturers are used for the car project as well. It's too early to tell.

 

[Saghost]

I'm actually one who doesn't doubt Apple's capability to deliver a great car once they decide they want to, even if it takes a while. What I don't get is why I should be worried for Tesla instead of the ICE manufacturers. I mean, if (when) the Apple tsunami hits, I'd rather be Tesla than BMW.

I'd agree with this. I'm really not sure how Apple is going to differentiate from Tesla - Tesla is already doing most of the things Apple historically does in industries - but I do believe Apple could make a good electric car.

I'm less certain of the other part - being able to build one of similar capacity for less money than Tesla, being able to build million car volume in prosuction or even battery packs by 2019 (remember, Tesla is looking to get as much capacity from the Nevada Gigafactory as the entire world had in 2013 - and they only think that's enough for ~500k cars.)

The lithium isn't that rare, and Apple has the money to throw around - but big supply chains take time and unless they start building (or funding partners to build) some seriously big battery plants soon, they won't be able to build cars in volume in 2019.

With Tesla's attitude and headstart, it'd seem like joining the Supercharger network would be an easy, obvious choice for Apple, especially if they remember that they can take gas market share instead of fighting over Tesla's as you and others point out.
Walter

 

[TEG]

It seems like there is some Apple vs Google rivalry angle to all this too...

iPhones vs Android phones
Apple Maps vs Google Maps
Apple iCar vs Google Self driving car...

We know that Google has contracted to have vehicles made already.

Perhaps this will be the "Coke & Pepsi" wars of self driving software alternatives ?

 

[MikeC]

I think Tesla investors need to face the fact that the entire PHEV and EV car sector will be very crowded across all models and price ranges by 2018-2020.

Fortunately for TSLA investors, Tesla is not in the PHEV sector - which is distinct from the BEV sector and will be much more crowded in 2018-2020. Conflating PHEVs with BEVs is a fundamental error in the short thesis.

What bears don't understand is that Apple joining the EV game will be the inflection point in the death of the ICE. There will remain plenty of room in the BEV sector, because as competition heats up and things gets more crowded, it will naturally expand and displace the ICE sector, until eventually encompassing the entire auto sector.

 

[tftf]

There will remain plenty of room in the BEV sector, because as competition heats up and things gets more crowded, it will naturally expand and displace the ICE sector, until eventually encompassing the entire auto sector.

Yes, and if this happens the process will take decades in the car sector, even in a best-case scenario for EVs. This is no overnight disruption as in other faster-moving (tech) sectors where a new entrant can gain significant marketshare (escape velocity over established offerings) within months or years.

There is no ICE car company that will sit there like a duck for the next one or two decades, in the end there is only one car sector. Car companies sell cars and associated services, not oil. Car companies will adapt to whatever propulsion method is demanded for by consumers or influenced by regulators in the future (see Norway, traditional "ICE" companies like Nissan-Renault and VW top the EV sales charts, not Tesla).

The true inflection point for mass-market adoption are better and cheaper next-gen batteries followed by charging networks, not a new player like Apple entering the market. But Apple has the luxury to time its sector entry whenever the EV price/performance mix looks more attractive vs ICE. The end of this decade might prove to be good timing...

 

[Crowded Mind]

(see Norway, traditional "ICE" companies like Nissan-Renault and VW top the EV sales charts, not Tesla).

Is that in dollars or units?

 

[James Anders]

In my first post I didn't predict Apple would take 11 years. I said Apple is where Tesla was 11 years ago. I also said that I thought they would take 6-8 years to get to production, which is the high end of the range you quoted for car development. Considering Apple has never built a car and they are intending to produce a very advanced car, I would think the high end of the range is more reasonable. Rather than 2019, I think around 2021 is more likely for Apple, not 2026. I think Tesla will probably have the upper end of the EV market to themselves for the rest of this decade, but I agree the segment will get very crowded, but I don't think it will happen until the early 2020s.

Yes, but we have no idea how long Apple has been working on this.

 

[Cobos]

Is that in dollars or units?

Neither
This far this year including august the Golf is the bestselling single model with about 11k sales (ICE, PHEV, BEV) with BEV well over 3k. Exact numbers is slightly hard to find without paid access to the data, since all those cars are qualified as Golf's. Model S has sold about 3k and Leaf about 2k. That's of course in number of cars, in dollar amounts noone is touching Tesla in the BEV space. Also keep in mind Norwegians love the Golf, it has been the yearly bestselling car I think 9 out of the last 10 years. And that's ICe versions only upto last year.

Cobos

 

[electracity]

Apple has vastly more resources than Tesla. Also, one reason Tesla was able to produce such good cars is that electric is apparently a lot easier to make than ICE. Apple has this same advantage starting "from scratch".

But I can't figure out where Apple would position a new car in the market. I also can't figure out how they expect to have acceptable margins making cars.

Apples rationalization may be the vast changes that will come to transportation and consequently society over the next few decades. Apple may feel they simply can't sit out the next new new thing, regardless of traditional margins in that biz.

 

[RobStark]

Apple has vastly more resources than Tesla. Also, one reason Tesla was able to produce such good cars is that electric is apparently a lot easier to make than ICE. Apple has this same advantage starting "from scratch".

Thanks for the newsflash.