Rumors have circulated around a launch date for Apple’s electric vehicle, but one billionaire boss had to remind the company of what it missed out on.
Yesterday, Tesla’s CEO Elon Musk tweeted that he reached out to Apple (NASDAQ: AAPL) “during the darkest days of the Model 3 program” to discuss the possibility of buying the automaker for one-tenth of its current value. This bit of interesting news came after ‘Apple car’ chitter-chatter resurfaced again this week with new reports pointing to a 2024 launch date. Apple’s not-so-secret Project Titan, which last year cut 200 employees, is apparently back to planning the production of an electric vehicle of its own. Rumors stated that the car is going to come with “breakthrough battery technology” and automated vehicle performance.
Following the report, Apple’s market capitalization grew by $102 billion, pushing it over the $2.2 trillion mark. Meanwhile, Tesla extended losses and closed 6.5% lower as investors view Apple as a real competitor in the EV space.
Silicon Valley billionaire Elon Musk must have been watching the news closely as he replied to a Twitter thread on the topic and stated that he reached out to Apple’s CEO Tim Cook about buying Tesla, but Cook refused to take the meeting. During 2017 and 2018, or as Musk calls it ‘the ‘dark days’, Tesla was struggling to increase production of the Model 3 sedan. Tesla’s boss informed investors the company was mired in “production hell” due to issues with automated production systems at its Nevada battery factory.
Apple’s electrical vehicle efforts
The Apple car news came as a bit of a surprise to some as the iPhone maker’s vehicle efforts have been slightly messy since 2014 and at one point, Apple even ceased electrical vehicle production to focus on its software. However, according to reports, the technology giant is now ramping up orders for auto parts and components from suppliers signaling the project is going ahead. Project Titan is led by Doug Field, a former Tesla employee, so it’s looking like the Apple car might square off more with Tesla rather than Alphabet’s Waymo.
Apple may have lots of experience in handling huge supply chains, but the fact is, vehicle production and mobile manufacturing are in two completely different leagues. Tesla is now the biggest automaker by market cap in the world and one of the most valuable companies to join the S&P 500, but even it spent two decades learning how to build cars efficiently before it saw a steady profit. To combat this issue, Apple would need to partner with a slew of manufacturers that are different from the ones it’s used to working with for its existing hardware. The benefit of being a huge multinational company means it has the resources and capital to do just that.
Central to Apple’s strategy for auto production is its new battery design which could reduce the cost of batteries whilst increasing the car’s range. The Big Tech giant plans to incorporate a “monocell” design to concentrate battery cells and create more space in battery packs by getting rid of some storage pockets.
Is Tesla worried about the competition from Apple?
Looking back now, we can say Tesla was lucky to have been refused by Apple as the company has overcome its production problems and has since racked up a string of quarterly profits. Wall Street is left wondering, are Musk’s tweets a sign of worry about the competition, or is he simply highlighting how Apple could have been miles ahead in their venture had they bought Tesla years ago? Whatever the reason, Apple still has a long way to go to catch up with Tesla.
Apple does have a massive cult following of loyal customers, the kind that must-have every product the company releases. So if done right, every iPhone owner in the future may opt to buy an Apple car too, but I’m guessing by 2024 Tesla will have made even more strides in advancing its own models.
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