Tesla (TSLA) may have a formidable new challenger in the high-tech autonomous electric car game, and it’s coming from an unlikely place: Apple (AAPL). Rumors that Apple is finally taking its automotive ambitions off the ground are hotter than ever, and several reports say it may have a partner for its so-called “Apple Car” in Hyundai-Kia.
“For Tesla, Apple’s entry into the EV race is a cross shot, and Hyundai is potentially a perfect EV marriage,” Wedbush analyst Dan Ives told Yahoo Finance.
Apple, like Tesla, would be entering the market from an external perspective. And with his exceptional knowledge of customer service, he could easily eliminate the tedious work of going to the local dealership. What’s more, Apple knows how to generate customer interest in its products and comes with an integrated loyal customer base. The company’s high-level supply chain management, developed by CEO Tim Cook, would help it compete even more with Tesla.
Apple will certainly have a long way to go to catch up with Tesla, but it could turn out to be the kind of challenger to the Musk empire that traditional automakers could only hope to be.
Project Titan faces Titan EV
Apple has reportedly been working on building its own vehicle since 2014. But the process of what is known as Project Titan has continued by leaps and bounds. First, they said that Apple was working on building its own car from scratch. So he was just working on standalone software and now Apple is reportedly teaming up with Hyundai to do the heavy lifting on the vehicle’s overall architecture.
Since Apple is supposed to use Hyunda’s Kia plant in Georgia, it already has an advantage over Tesla – which had to develop its production capacity. At one point in 2018, Musk was sleeping on the floor of Tesla’s production facility and set up an additional assembly line under an outdoor tent. Notably, Musk said he tried to arrange a meeting with the Apple cook at the time to sell the company to Apple. But Cook did not respond, according to Musk.
There are two big reasons why Apple can rival Tesla – the tech giant knows how to please customers and knows how to make high-tech products that people want, but don’t need.
“No matter how you cut it, it will be a rival for Tesla,” Patrick Moorhead of Moor Insights & Strategy told Yahoo Finance. “Like Tesla, Apple focuses on experience, so I see them in the same sphere of competition.”
To understand Apple’s commitment to customer service, just go to the Apple Store. You can come in, speak to a salesperson and get a phone right away. They don’t bother you to upgrade or buy accessories – they just set up your phone right away.
If Apple can bring that perfect approach to cars, something Tesla has achieved, then the tech giant could change the game for the electric vehicle industry.
“Think about areas of improvement for customer satisfaction,” said Moorhead. “Unless you drive a super premium car, afraid to go to the dealership. And there is still the whole shopping experience. I expected them to change that dynamic. “
Apple also excels in positioning its products as semi-luxurious devices, before launching more affordable versions for ordinary consumers. A flashy first-generation vehicle, similar to the original Tesla Roadster, could spark interest in a mid-range second-generation vehicle.
“I feel like they are going to have to release a statement piece first, before they go later, let’s call it a type of mainstream audience,” said Moorhead.
There is also the fact that Apple already has its own financing arm. Using favorable interest rates, the company could give its vehicles a broader potential customer base.
Apple and Hyundai are working towards an agreement
Of course, there is no guarantee that an Apple Car will hit the streets anytime soon.
As of now, reports indicate that Apple and Hyundai are discussing the construction of an autonomous electric car. According to AppleInsider, citing TF Securities analyst and frequent Apple predictor, Ming-Chi Kuo, Apple could use Hyundai’s recently announced E-GMP electric vehicle platform for the Apple car. The Wall Street Journal reports that Hyundai is already looking for partners to help build the Apple car.
It may sound strange for Apple to team up with a third party to build its own vehicles, but this aligns with its standard business practices. The iPhone maker already pays manufacturers around the world, including the United States, to produce individual parts for its various devices, before sending them out to be assembled by companies like China’s Foxconn and others.
And part of that partnership means that Apple is spending to build the facilities of those manufacturers. This would give Hyundai even more incentive to work with Apple.
At the moment, it is unclear whether we will get a prototype Apple Car in 2022 or a mass market vehicle in 2024. But either way, Tesla may not be leading the EV space much longer.
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