This is starting to make increasingly more sense even though Apple making a car seemed laughable a few years ago.
Apple is fundamentally now a company that can move immense amounts of capital into new industries with the underlying ethos of user experience. Apple Card was perhaps a dipping of the toes moment.
In theory, Tesla shouldn't be worth what it is because the tech behind it is increasingly getting commoditized (though they work hard to stay slightly ahead). But people love Tesla and it's the first choice EV because they've really thought through the UX of a semi-self driving car EV thoroughly.
Apple is just about the only company with a similar ethos and enough money and patience to be a viable competitor and have a competitive brand known for quality.
Despite becoming more similar in recent years, the cell phone supply chain is still very different than the automotive supply chain. The number of parts/unit differs by an order of magnitude and so does the size and weight, not to mention manufacturing techniques and materials. These are capabilities, not so much skills, and they aren't as transferable as you may think.
For instance, logistically things are very different in the automotive space. Many, many more people are required to ship a single unit. You also have many more variables that can hold up a production line anywhere in the hierarchy because you rely on more 3rd parties for parts. While these things are also true of consumer electronics, you may rely on a dozen suppliers for an iPhone, car companies often rely on hundreds.
Materials are also very different in the automotive space. You have to build with materials that will last 100k miles driving a 80mph in all weather, day/night, freezing/scorching etc etc. It is a very long tail to cover. Apple can do it, but it will take years and many, many partners to get it done.
I'm not sure I see that. Clearly they are good at making computer like things, but it's not like they're God's gift to supply chain management. There's been quite a few mistakes over the years. Hard to see them doing better than car companies that have been building cars for decades.
I'm also not sure what Apple's edge here is. At this point all I really want out of an entertainment center is a screen for my phone to plug into. Everything else is better done as knobs and buttons.
I don't know that I completely buy that. Shipping/transport and resource management at the scale of automobile production is a rather different world than consumer electronics where literally everything anyone cares about fits on a plain old wooden pallet.
Apple does have smart people, and they obviously have a ton of cash. So they absolutely could make a play here. But to imagine that they'll walk in to a market that Tesla has been growing successfully in for a decade and be competitive out of the gate seems like a stretch.
> a skill that is more and more transferable - especially for electric cars.
What does that matter?
There are Car manufacturers that have basically had infinite capitalization and funding for a decade and the legal system + technology barriers just didn't move. Supply chain was never an issue.
Apple's not going to see any different results, so I am puzzled by this optimism.
I don't think you can supply-chain-manage your way into making cars. The hard part of manufacturing automobiles isn't design, it's manufacturing. You can't just pay some third party contractor to spin up a car factory that does 90% of the work for you, like you can with electronics.
But Apple have outsourced all their manufacturing. That, as we've seen in Tesla's struggles, is a huge component of making a successful product. Agree with the vertical integration aspect + nearly unlimited capital.
Backed by Goldman Sachs, a company that destabilizes whole economies for profit. Apple isn’t exactly hiding which side of the income spectrum they prefer.
RE: User experience - best card I’ve ever used. Integrates with my watch and phone in such a way that I don’t even have to pull it out to pay. Can dispute charges with a single text. Easy to see full details of spending and billing. The cash back pays for my monthly Apple One account too.
This comment implicitly rests on the fallacy, learned the hard way by Tesla, that making electric vehicles is just like making any other electronic thing.
When is the last time an electronic mfg had to deal with a billion dollar lawsuit because they didn't follow industry best practices for design like Toyota did after the acceleration scandal? Does Apple have experience with the NHTSB or other relevant regulatory agencies? Sure, there is a lot of gatekeeping in the auto industry, but it's for good reason. Cars can and do regularly kill people. It is not the same as making an iPhone.
Apple has been on the receiving end of literally dozens of billion dollar lawsuits from many many companies. They battle lawsuits every day for IP infringement, to trade craft, to patents - and have over 200 in-house lawyers.
They can make phones because they hire/hired experts who can make phones. I doubt they would use those same electrical engineers to design the brake systems. I don't think there's anything evidence to suggest that they couldn't acquire/hire the right talent.
> they've really thought through the UX of a semi-self driving car
Minor side note. I'm sure a lot of the experience is well-designed but I can't help but grimace every time I see that huge touch tablet instead of physical buttons on the dashboard.
That’s Ok. A lot of people thought keyboards on phones were an absolute requirement too.
Like with phones, having touch screen control everything provides extraordinary flexibility in rolling out new software features and ultimately improving UX.
Remember this design is supposed to lead the way into an FSD future achieved through purely software updates.
Whether they succeed in automating the majority of miles driven, they designed the car with that future fully in mind.
For what it’s worth, it’s one of my favorite parts of the car, and certainly it’s my kids favorite part of the car.
>Apple is just about the only company with a similar ethos and enough money and patience to be a viable competitor and have a competitive brand known for quality.
Mostly agree, though I suspect a few of the major car companies like Volkswagon/Audi and Toyota/Lexus are capable of this as well.
But yes, Apple has the cash reserves to not just manufacture electric cars, but to build out the necessary infrastructure network as well:
- charging stations blanketing the country
- battery replacement stations for faster "charging" on the fly
- local maintenance stations
- etc..
Apple could centralize sales to Apple's website, and transform "dealer networks" into "maintenance networks". Sales can be handled in a centralized manner, but maintenance still requires locality.
All that requires large upfront CapEx, but Apple is one of the few that has more than enough cash reserves for that.
>and transform "dealer networks" into "maintenance networks".
People tend to overlook just how many service centers are available for the big three (about 10K), not even counting independent garages. Tesla has..500. How many will Apple have? If the Tesla service horror stories are anything to go by, I can only imagine what it would be like for an iCar once production ramps up.
"In theory, Tesla shouldn't be worth what it is because the tech behind it is increasingly getting commoditized (though they work hard to stay slightly ahead). But people love Tesla and it's the first choice EV because they've really thought through the UX of a semi-self driving car EV thoroughly".
No need to theorize at this point. Plenty have pointed out how overinflated Teslas value is at this point. It's pretty much cult of personality that is propping them up at this point. Tesla is actually very similar to Apple in that they "pioneered" a new market and that has created an identity of leadership in that market. I'm not sure Tesla is going to be able to keep up as the competition continues to grow rapidly.
>Apple Card was perhaps a dipping of the toes moment
Was it really? Dozens of companies have credit cards. Walmart, Uber, Paypal, Venmo, Best Buy, Amazon...it didn't real strike me as big things happening when Apple announced their credit card.
>Apple is fundamentally now a company that can move immense amounts of capital into new industries with the underlying ethos of user experience.
The user experience of many Apple products is notably substandard. Maps, homepod, keyboard, list goes on. What Apple is good at is integration (both horizontal and vertical) and managing user perception through design.
Different take here. I think they should stick to the computer/operating system of a car and either take a large stake in an existing automaker or license the technology to several of them.
Actually _making_ cars is doomed to be a failure. You need a massive workforce and very large factories. It is fairly low margin compared to even computer hardware let alone software. Then they have to support these cars which means you need a massive service network. It really is a bad bad idea.
Making a car with the likes of Magna is just plain stupid. You can’t get any sort of volume to make the car cheaper and get the OS into the hands of millions of drivers.
Here is what they should focus on:
1.) Sensor suite for self driving.
2.) AI computer for self driving.
3.) Main computer and screen(s) for navigation, car controls and games/audio/video apps.
4.) Autonomous software.
Work directly with automakers from the ground up and design the vehicles jointly with them to ensure the systems feel native rather than bolted on.
While I would really like to have in other cars components made by Apple I dont think Apple is a company which sells parts to be integrated by someone else. They like and they are good at having an end to end experience with the enduser.
Also I think they and the market (investors) dont want/expect them to be a part of a supply chain.
I couldn't find anything about this after a brief Google, and the Wikipedia article for Apple Card doesn't say anything about this. Could you provide more information?
> 'In theory, Tesla shouldn't be worth what it is'
With all due respect, I would like to articulate and counter your point with some insights.
Tesla as it stands today at ~$600B is priced at monopoly status - that they have 'won' the next decade in transportation and electrification. Whether you buy into that or not, consider the following:
- Tesla is the first (and so far only) company that has successfully been able to produce electric vehicles with positive gross margins at scale. No other competitors have scaled (yet) and EVs made from traditional automakers have been sold thus far at negative gross margins (i.e. each one that leaves the lot costs thousands or more dollars at a loss). While Tesla 'just broke out' as a stock in 2020, starting with large cash-flow generation from their factory in China - they have been working at this for well over 5 years. The real challenge for everyone making EVs is scale, and depending on how you slice it, Tesla is - really, really far ahead regarding their head start. (Model 3 was ANNOUNCED in 2016 and first cars were produced and delivered in 2017. Look at this announcement today end of 2020, and car production in 2024 - not even accounting for scale. This is really hard to do.)
- Your point about commoditized parts is valid in theory. However, as someone in the {renewables} industry who has had many first hand conversations with those buying Li-ion batteries at scale - the little talked about challenge for everyone else in automotive is 'where are you getting your batteries'? Li-ion cell manufacturers are generally broken up into Tier1, Tier2, Tier3 suppliers. From my conversations even pre-pandemic with folks - Tier 1 supplies were already allocated SEVERAL years out. Tier2 supplies are hard to acquire in large volumes as well. That leaves you with 'shitty' Tier3 supplies for which most of those cells are ending up in things like scooters and Energy Storage (not cars). And while some are good, suppliers can be tier 3 either due to small volumes or unreliability (must all be tested, and even still its questionable how many cycles you'll really get). Automakers want Tier 1. Tesla's latest event, 'Battery Day' while 'disappointing' the street and non-industry folks for not announcing some 'Million mile' or other 'groundbreaking technology' is significant because the limitation to Tesla's growth, much like others for making EVs, comes down to batteries. The factories need to be built - and for most of what optimists imagine for a rapidly changing future, many of those shovels have not hit the ground yet on the forward infrastructure. And that isn't even accounting for the fact that it takes at least 1-2 years to get a single cell factory ramped up. And we aren't even talking about the mining capacity (particularly lithium and nickel) that all of these announcements imply already exists.
And back to Tesla's valuation - there is lots of focus on their current valuations assuming they have solved self-driving. There's so much going on with Tesla as a stock (look at Tesla Semi-truck, their Energy Storage businesses for example). And the winks and nods towards launching an uber-like ridesharing service. While I am very skeptical of their ability to have self-driving 'done' in their posted timeframes, I think their value is priced that , whenever it happens - they will be first. So interpret that as you may.
When factoring in the likelihood that they will be the next apple for transportation across personal & commercial transportation for the next 1-2 decades, you can end up at 600B easily. If you are interested in seeing how, just on the driving component - Ark Invest has posted their models if you want to take a deeper read to see if you agree. [1]
And 2 cents on Apple's role & competitive advantages here: They, prior to Tesla were for a while one of the larger single consumers for Li-ion batteries (Macbook, Ipods, iPhones, etc) in electronics. Add in their expertise with battery management and longevity systems (but for systems of a smaller size) combined with their existing supplier relationships & software capabilities, if I had to bet on Apple or one of the existing automotive companies - I'd probably make my bet on Apple purely from a capabilities and competencies perspective.
Tesla seems to be the most sold EV car to date, with more than 650k model 3s shipped so far. That's remarkable, but it's the same magnitude as the second on the list, Nissan Leaf, which has 500k shipped.
There's also more to electric than battery EVs. It was obvious from the start the transition to electric is real but that real scale will start out with hybrid electric for the first decade or two. Any manufacturer serious about scale would want to start in that end because in order to be good, models needs to be designed from the ground up. In comparison, Toyota has shifted 15M Priuses. That's scale.
I think you underestimate some of the existing car makers.
Making cars isn't just a question of R&D, it's a question of being able to manufacture at scale and quality.
This is something that Telsa have really struggled with - as a result the reliability of Tesla cars isn't as good as it should be. Telsa need to really crack this - but it's not as easy as it seems - that's why certain car brands succeed in petrol era, and others didn't - the ability to make them well is what, in the end, separated companies.
Electric cars are fundamentally a lot simpler than try to drive the car forward with a series of controlled explosions - but the key usability challenges are:
- charging times
- range
Progress is being made on both, but if somebody can really crack them, that's the game changer.
I tell everyone I view Tesla as a software company first and that their tech was a decade ahead of other car makers. I think it will still take another 5-8 years for a traditional automotive manfacturer to get close. Apple, they could do it.
Tesla is a Manufacturing company for energy and transportation. It just happens that doing those things well requires you to have 10x better software teams than other companies including older car or even tech companies.
All of that is true, but cars are huge in terms of complexity, the types of labour/supply chains, distribution, etc. etc..
I guess they are the company to 'try it' but really it's a monster bet.
It'd be interesting if they have an 'angle' that allows them to start small, possibly with a specific kind of public transport or closed-system solution for urban transport, with entities like Dubai (i.e. cash flush) buying in big.
> This is starting to make increasingly more sense even though Apple making a car seemed laughable a few years ago.
Which, for what it's worth, is an illustration of how our intuitions about future likelihoods aren't very good. We tend to see as implausible things that are too different from how they are today, overlooking how much things can change in a few years.
Tesla is an electric car company and an energy company, and they are leading both sectors right now. You can say that their market cap should not be greater than Toyota or Ford etc because the number of vehicles they produce is a lot smaller, but the world is going electric (really, renewable) and Tesla is tee-ed up to take large chunks of the solar panel and car markets. They have said they are going to produce a smaller version of a model 3 that costs under 25K USD, which the Europeans will buy in large numbers. They will be the first company to complete FSD also.
My opinion doesn't mean anything, but I think in 2030, Elon Musk will be the richest person in the world by an order of magnitude and Tesla will have the largest market cap in the world
But we can’t ignore Apple’s ability to sway people towards their products. Apple fans treat those products like jewellery and Tesla may not be the premium flagship car that it’s aiming to be after a few years
Apple is no better than Qt in this space - and it will only make electronics - assembly will still be on Ford/GM - Tesla's revolution is a more automated assembly.
Don't know why you're being downvoted. Musk has consistently said their main goal is to become the most advanced manufacturer in the world. Building the machine that builds the machine is what they're aiming for.
Tesla didn't invent batteries. They didn't invent electric motors. They didn't invent pretty much anything novel.
They execute superbly, had a brilliant strategy of starting as a luxury vehicle to be the beachhead for getting an economy of scale, and were risk takers, but lets not pretend they invented the market. They didn't.
No doubt they have loads of superficial patents though, but Tesla has an open patent policy and a declaration that they won't sue, so that doesn't seem to matter much.
Apple can buy a company like Magna Int with pocket change. Recall that Magna made the "Sony" electric car, bumper to bumper (Sony put in some screens demonstrating a Sony-esque UI), because that's what Magna does -- they're the maker behind a lot of automobiles, either in part or whole. And Magna has loads of patents around the engineering of vehicles because they've been doing it for decades.
Everybody can buy Tesla cars and stock so there is the rest of the world. That's not very up to date with Musk's tweets and political stance, because of the language and cultural barriers. What they see are cool cars and spaceships, so Musk should be cool, right?
My work-issued mac doesn't turn on outdoors in winter, it overheats and shuts off in direct sunlight in summer. It's software crashes twice a week. The computer turns to garbage in 7 years through obsolesence and general wear.
It is irrepearable and components are impossible to obtain because Apple has punitive contract with suppliers.
This week assebly line workers are burning down the factory in india because of wage theft.
What in the above gives you an impression that the car they build can be trusted with the life of your family?
This fetishising of Apple has to stop, making pretty laptops doesn't mean shit when lives are at stake
While Apple surely has lots of mechanical engineers, Apple doesn’t have the greatest track record of successfully innovating moving components with high lifecycle requirements.
Would you be excited to drive a moving vehicle designed by same company that has class-action lawsuits against many of it’s mechanical innovations: butterfly keyboard, failing screen hinges, bending iPhones, etc
On second thought, maybe Apple doesn’t actually have great mechanical engineering innovation chops.
The Tesla Model 3 already embodies the minimalism, software focus, and vertical integration that have driven Apple's success in the phone market. Right down to the custom SoC and capacitive touchscreen in lieu of buttons. I'm really curious what Apple's differentiators will be.
Also, 2024 still seems aggressive to deploy self-driving for real.
Having recently sold my Tesla Model 3 I can say there is a lot to be desired with that car. The biggest lesson from Tesla is that cars are not cellphones. Having one display off to the side, without buttons, that does everything is an awful experience in a car. I hope that Apple learns that lesson. I think if they had gone first they might have made that mistake too, but now that it's been tried they can find interesting ways to innovate that don't break the experience.
I also don't think they will try for self-driving out of the gate. I know a good number of the experts in this field and no one thinks full autonomy is ready. The moat that Waymo has built with their particular kind of testing and iteration is diametrically opposed to how companies like Tesla, Lyft, Uber etc have tried to do self-driving. Even they are going to be restricted to the easiest of locals for years.
> Having one display off to the side, without buttons, that does everything is an awful experience in a car
I have to strongly disagree with this. The touchscreen is great for the vast majority of things it replaces. The only physical controls I ever miss are for temperature (which is a very minor complaint) and windshield wipers (though I would also accept auto wipers that actually work). I do think the UI smoothness and touch latency could be slightly improved, and Apple would do better, but Tesla is already so far ahead of every other car manufacturer there that it's not even funny.
> The biggest lesson from Tesla is that cars are not cellphones. Having one display off to the side, without buttons, that does everything is an awful experience in a car.
This is both the most functional and most beautiful design choice I've ever experienced. My favorite part of my Model 3. You quickly come to realize that voice control does everything and that you should never have to reach for a button or fiddle with climate controls, etc.
Tesla realized what all other car manufacturers failed to see, you don't need physical buttons because you don't need buttons of any kind. I'm never buying another antiquated car with physical buttons again.
The fact that everything is on the center display is the biggest reason keeping me from seriously considering buying a Tesla. Distractions don't belong in a car.
> I think if they had gone first they might have made that mistake too, but now that it's been tried they can find interesting ways to innovate that don't break the experience.
I’m just hoping that they don’t relegate a lot of stuff like climate control to a Siri-only interface.
I disagree with your assessment of the one screen driving experience. First and foremost the use of the screen is incidental to driving. Just the normal eye travel one has when checking the mirrors is more than sufficient to pick up your speed and outside of that the glance time is insignificant.
If you really want to make this fun, you don't even need to know as you can use traffic aware cruise control, a feature many cars have, to set and forget your speed on any road.
I have two issues with the UI/Human interface that Telsa has followed. First, their automatic wiper solution is dreadful and while you can instant a wipe action by pressing the button on the end of the stalk I believe the variable rate should be available on the stalk.
The second is that I think the steering wheel would be better served with buttons dedicated to cell phone use, namely accept, ignore, mute, and hangup.
However it should be noted the cars voice controls respond very well and you can easily change the temperature should you want that way, there are a lot of settings easily changed by voice but Tesla does not alert you to them.
The best way to grade their UI though is that I can muscle memory activate many features including one level down options. Of course you can just let the car drive and play with the screen all you want, something I have done to prove a point but the simple fact is...
I rarely if ever, as in nearly never, need to access anything through the screen as its all set and forget. Now I get into other cars and think, damn this has enough buttons and screens to be an airliner.
It won't be but a generation before we look back and wonder how anyone though six gauges, forty buttons, and three or more levers, were ease of operation, Not all cars will be as simple as a Tesla but the age of forty buttons is going away.
(Seriously, count how many buttons are in your car - then try to remember how often you use them)
> The moat that Waymo has built with their particular kind of testing and iteration is diametrically opposed to how companies like Tesla, Lyft, Uber etc have tried to do self-driving. Even they are going to be restricted to the easiest of locals for years.
Nobody has figured it out out yet, and a 'moat' for a market that is basically impossible to a big money-maker is not a 'moat' at all.
The quest for self driving is not the same as the quest for the first commercial deployment. Solving general self-driving is the real quest.
And I don't trust any experts to predict this correctly, as nobody knows yet what the solution actually is. Some experts say one thing, others say other things.
I was under the impression that Lyft wasn't building self-driving in house and was instead partnering with Waymo. It looks like they do have in house self driving:
https://self-driving.lyft.com/level5/
I also know that both Alphabet and GM have large stakes in Lyft. I bought stock in Lyft with the expectation that they will one day be acquired by one of their partners.
Apple's been reasonably good with the buttons they do make, like the crown on both the watch and their new headphones. Also, a dedicated silence switch on the phone is something not every manufacturer thinks is important.
I do like tesla, but I strongly agree about the display.
I test drove a model 3 and ... couldn't buy one because of the dash.
I think there should be - always - status in line of sight of the driver.
The model 3 dashboard in the center of the car is just a bunch of bathwater with no baby.
Some people won't care. I've had friends say they got used to it.
I can... almost... think of it like an off-road motorcycle with a handlebar and no instruments.
But personally I couldn't buy in.
Related, I think the controls on the model 3 have also been over-minimized. The scroll wheels have the feel of a $3 computer mouse, and autopilot overloaded on the gear selector is cheap, not elegant.
I know I am not alone in this, but I absolutely cannot stand touch screens in cars, and would like for this trend to reverse. It is hard to navigate without physically looking at the screen, which is a huge safety hazard while driving.
For some things, like navigation and settings, I absolutely love a touch screen. For other things, like wiper control in the Model 3, I definitely do not like it and it is worse.
I think this might just come down to personal preference. After owning a Model 3 for a while now, I can't stand my Audi (or other cars) that aren't touch screens. There are far too many buttons and dials. It is overwhelming (and ugly to me). The non-touch UIs are clunky and confusing and often far more distracting for me as I try to figure them out.
>I'm really curious what Apple's differentiators will be.
There's room for more than one car company like this. If Apple brings high quality, tight fit and finish, elegant design, software focus, vertical integration (including their new M1 processor tech), logistics support (charging station network, maintenance, etc), and "next-level batteries" to the mix, then I'm sure they'll find space in the market.
If Apple can execute with electric cars as they've executed with consumer electronics, then they'll be competing not just with Tesla, but directly with Audi, BMW, Mercedes, Lexus, etc.
The processor tech isn't going to do much for cars. They could get by with something cheaper no doubt. I don't think anyone really cares about clock speed or processor efficiency in a car because you're not really doing anything that last decades' processors couldn't handle (especially with less bloated code bases). Maybe face recognition + key fob presence to authenticate and start the car.
I don't know if Apple's quality is going to translate to cars either unless they poach a bunch of people. Safety features will compromise the quality at some point, but maybe they're good enough to work around it elegantly.
Plus people paid a premium for Apple's quality, but are they willing to do so when that premium is multiple thousands of dollars extra for a car? They could afford low/zero cost financing if they wanted to.
An EV that just works that appeals to the luxury buyer.
Tesla is still far from that. I've yet to meet a tesla owner who's car just "Works" without any issues or fiddling.
GM's & Nissan's EVs fit that bucket. But they are designed as "buget" cars and dont evoke a desire from buyers to be excited about them on a day-to-day basis.
>logistics support (charging station network, maintenance, etc)
Honestly, if Apple bought out the existing non-Tesla charging networks and dedicated even a sliver of their UX talent to improving the charging experience, they would really push things forward. This is, of course, assuming that buying the charging networks would make it past the anti-trust people.
> I'm really curious what Apple's differentiators will be.
In the car market, being a different brand is a differentiator. Ferrari, McLaren, Bugatti, Lamborghini, and Porsche don't offer vastly different products. But the car market is heavily driven by people wanting something different from their friends. Once Teslas become popular enough, people will want something else just to be different.
Bugatti and Porsche are about as far away as Porsche and Tata. There are more differences between cars in terms of unique tech than there are between Apple and Android phones today. I don’t agree with this at all.
Apple build quality has nothing special in the absolute. It's just that most of the phones or laptops of tons of manufacturers have cheap plastic body. But there are also plenty of less cheap but really nice products from other brands, and there are plenty of consumer electronics devices that have nice mechanical build quality. You can even easily found really cheap objects, compared to premium phones or laptops, with a nice build quality. You don't see that often for computers and phones because low cost models are low margin and the market for a nice mechanical design but otherwise low end specs is too small.
Instruct an engineer to design something that is not crap and they will do it, and it will be mass produced with tight tolerance if specified like that. On the manufacturing side... Apple does not manufacture anyway.
And that brings me to: a car is not exactly the same thing as your small household appliance. Like we saw with Tesla, it is not trivial to do with a good build quality, both on the design front and on the build front (way more difficult than small and mostly static objects) -- and it is harder to reject a car with a not stellar build quality because that's more expensive and a huge part of the value is in the mechanics. And quite related: for now Apple does not manufacture, if they start to do cars, will they? Otherwise who will?
Tolerances and build quality weren't the problem with the butterfly keyboard. It was just a fundamentally flawed design that was not durable enough for real world use.
A big differentiator will obviously just be the apple brand. There's going to be a huge number of people who just want to be seen driving around in an apple-branded car. And a lot of those people are currently tesla fans
It's not enough to have the best hardware, software, and vertical integration. You also have to know when to apply it and when not to. A capacitive touch screen makes for a terrible driving experience. Apple doesn't simply add touch to every product it can. Note how the Airpods Max have a huge surface that looks almost like a Magic Mouse, but volume is controlled by the tactile Digital Crown instead. I expect Apple to make better choices than Tesla overall.
If fully autonomous AI driving can be done, it will be the service on top that will drive difference. Like houses, what accommodations does it have. Sort of like air travels economy, business, first etc. The hp of the car won’t matter as much anymore.
> I'm really curious what Apple's differentiators will be.
I bet they support CarPlay, at least :). I have CarPlay on all my cars excdept for my Tesla, and it still annoys me. I won't buy another Tesla that doesn't support it.
Utilizing the knowledge they've learned in the last 10 years, by developing their own SoC, their machine learning efforts, and integrating their product ecosystem into a vehicle could be a pretty big differentiator.
Well Apple is known for its QA, and Tesla is known for its lack of QA. In general, Tesla fans want the latest bleeding edge technology, while Apple fans generally want something that "just works".
It's funny because it's true. The door handles are among my least favorite parts of the Model 3, along with the control stalks on the steering wheel (both their mushy feel and lack of physical wiper controls combined with the crappiness of the auto wipers). Apple could certainly improve on those, although Tesla does have better handles on their other cars already including fully automatic doors on the Model X.
> I'm really curious what Apple's differentiators will be.
Really? Why are you not curious what the differentiator of all the car companies out there is? Why don't we just have one car company?
(Hint: There is so much demand, so many different tastes, budgets and features and regulation, that a single company will never serve all of them. Tesla is a niche product and I for one would never buy one)
The iPhone was special in the regard that there simply was NO competition. We are not talking EV vs combustion (which was Tesla's main step, and even still, everyone knew EVs would work and how they work, but nobody was ready to fully commit to them yet). We are talking horses vs. cars. Apple managed to establish themselves in a market that most companies didn't even think exist...
So no comparison here. All Tesla has done is make EVs more approachable and "cool" for the masses. However they have literally ZERO differentiator compared to established car companies. They are going to tank so hard stock wise in the next 10 years that investors will wonder what hit them.
I'm not curious about other car companies because their products are on the market already and their differentiators are well known by everyone...
> they have literally ZERO differentiator compared to established car companies. They are going to tank so hard stock wise
Their stock is insanely overvalued, no argument there. But they have one of the largest installed and fastest growing DC charging networks, software that doesn't suck, and the most capable and fastest improving driver assist system enabled by a proprietary custom ASIC. That's far from "ZERO" differentiators, especially in a world where other manufacturers keep faceplanting on their software efforts over and over again.
Perhaps Tesla is the Blackberry of the car industry, waiting for Apple to show people what they've actually been waiting for in personal transportation. :P
Would Apple be required to make their car parts interchangeable with the generic aftermarket brands and car service centers? IIRC there is a law specifically for car manufacturing.
I can imagine a dystopian future with custom non-standard parts, specialist repair centers, restrictions on what you can do with it, Apple being able to track everywhere we go, what we listen to, who is with us, and establishing a network of devices that work together but not with other brands. And that's just their phones, imagine their cars!
I mean, a lot of the recent right-to-repair controversy in the US has been centered around farmers, and their ongoing battles against machine producers / makers like John Deere.
The gist is that you can't do jack sh!t on a modern John Deere, because all the software involved to diagnose/modify/operate their machines are strictly proprietary, and only available to the company, or authorized dealers and repair shops.
Here's how this could work with personal cars:
Let's say you purchase a Apple Car, and after a month the low washer fluid message starts flashing. Not only does it flash, but every 10 minutes or so it interferes with your whole media system, with some voice stating that you need to fill up on washer fluid.
Turns out your washer fluid level is actually OK, seems to be some sensor error, or bug in the software.
Problem is - you can't touch the car, mechanically or the software. Any modifications will essentially brick the car.
Only way to get this error fixed, is to bring the car to some Apple repair shop, where a tech will fix the problem in 30 seconds, and bill you $1000 for the work.
Other than the bricking part, that's the kind of stuff farmers are experiencing with quite expensive machines.
Easy. Most important parts are chipped and are coded to only work with each other. Without the private keys you can't make any other genuine part from another Apple car to work in your car.
Taking your car today to a factory dealer or authorized shop for repairs and servicing is akin to a walled garden. They would use factory parts and factory pricing.
There are lots of reasons why you might want to stay inside the walled garden. The higher the value of the car, the stronger they become.
Actually, most equipment in a modern BMW is keyed to that particular vehicle and cannot be replaced without a visit to the dealer. Everything from the seats, to the radio, to the headlights are all on a CAN bus and have to be coded to that specific car before they will work.
Try taking your non-Tesla EV to a Tesla DC charging station, or vice versa. They've finally announced a CCS1 adapter for the Korean market, but there's nothing for the US yet.
Apple has been in and out of the car game for a few years now, with executives coming and going. What I'm about to say will be as meaningful as this hear-say article, but I feel that Apple management, and its shareholders, have no idea what it means to build a car. Things like this need 100% commitment from the management, Cook just doesn't seem like the guy to do it.
> but I feel that Apple management, and its shareholders, have no idea what it means to build a car
I feel like people pretend that building a car is way harder than it actually is in 2020.
All the components to build a car are readily available. A person can buy the parts on their own and put them together in their garage. It isn't like they have to go get a pick axe and start mining ore to create everything from scratch. Apple just needs to buy the components that already work, and then do what they do best and perfect that parts that haven't been perfected. In this case, the battery, the motor, the onboard computer, and the software. And based off what Apple has built in the past, these are the things that Apple would be REALLY good at.
It isn't like they have to invent tires and drive shafts.
I know I undersold the difficulty of making a car in this comment, but come one, Apple is 87 times more valuable than Ford. They have enough cash on hand to buy Ford 5 times. Money might not solve all problems, but it really really helps.
I work for a tier 1 EV supplier, I've spent 2 months in Hyundai's Namyang R&D center, several weeks at Aston Martin's facilities, and some others, you undersold it by A LOT. Ford, GM and other veterans on the industry have long lost their original spirit, just like any other company, but what they have is established processes and supply chain management, and that takes decades to do right. You can ship a 1st gen iPhone without a working camera, vehicle recalls hit you much harder.
Elon Musk, the guy responsible for sending humans to the space station, a feat that has only been matched by the largest governments, stated that building modern auto manufacturing is harder than building rockets.
Which one? I mean, even a Tesla has over 40 computers on the CAN bus. Cars may look simple when they just have a touchscreen interface, but they're really a small network of computers that can be driven. Engineering, and then building a car is really hard. Tesla has proven an upstart can do it, but they've been at it almost 20 years and Musk himself says it is very hard to build cars.
I'm sure Apple can do it if they put the resources in, but they're less than 1000 people deep at this point. 1000 people is a small department working on something you've never heard of at a large automaker. I don't even mean top secret stuff, I just mean day-to-day shit that most people don't think about, like drafting repair routines for each possible thing that can go wrong that someone in the field needs to fix in a timely manner. You take your car into get repaired and only 2-3 people may touch it, but that's nothing compared to the hundreds of people that worked on the information and software that those 2-3 people used to fix your car.
Not to mention the different software that is running in all of the 40+ computers in the car... or the hardware and software that's used to communicate with/diagnose problems with/update those computers.
Even after the car is engineered, it takes over a year to then engineer all of the tooling, equipment and processes that will be used to mass produce that car, put that tooling in place, configure it, test it, train people to use it, etc.
Modern cars are marvelous machines, and there's a nearly unbelievable amount of effort that goes into designing, building and repairing them.
Building one car and building millions of car is not the same thing. Car production, distribution and servicing is a totally different very localized problem.
Apple can do it if they really want do, but lets not pretend it is easy.
That's one way of interpreting it. I would venture that their public dabbling is indicative that that they do understand what it means to build a car, in the sense that car manufacturing shouldn't be underestimated.
Going all-in on something like this when you're not ready is just a waste of capital and nobody wants to be the next Fisker. Historically speaking, Apple has usually made sure all their ducks are in a row before launching something, whether it's going into processor design, audio, or launching a credit card. There's quite a bit of chess pieces that were put into position first, and a lot of that was done via hiring, acquisitions, and partnerships. That should demonstrate that Apple has gotten into other industries regardless of how much management or shareholders previously understood the problem. In other words, they seem to understand when they don't understand.
With BMW declining to be a partner all those years ago (allegedly), it makes sense to me that they would put their plans on the back burner. I'm still skeptical that they can (or want to) do this without a major manufacturing partner, but we'll see. Or, given how conservative they seem to be with their capital, maybe we never will. The AirPods Max project allegedly started 4 years ago, and those are just headphones.
I think Apple is one company I would trust with entering other verticals especially in the hardware space. While phones!=cars, I wouldn't put it beyond their team to deliver on this.
One could look to Apple's tv show catalogue as an example of them entering a new industry without much experience. They don't really have expertise in it, and it's probably suffering as a result. But then, they also have a ton of money to burn on it, so it's not without its merits. I think this will be very hard for them to do, and I think they'll look like they're making dumb mistakes for a while. But if they really want to go this way, they'll probably succeed in some form.
I don't disagree with you assessment. I feel like he could be able to forge a solid partnership with Ford as the move into the EV space. Also with Ford's(F) market cap of $34.89B Apple could vary easily just buy them outright if things go well.
It seems like such an utterly different business. It seems as if there are so many more natural extensions in consumer hardware and software tech (as well as many not yet imagined). And I agree with your basic point that this is something that they'd almost have to set up as a separate company. And then you have to ask: "Does a well-funded EV startup sound like a smart business plan?" Maybe it does but it wouldn't be my first choice.
I think most of all this shows how serious they are about the project that they keep pushing it despite potential setbacks. I don't think it says anything about the ability to build "a car" but rather, that they are still experimenting with finding the right product. Apple doesn't release a product until they think it is "right".
Just did a quick check. Apple can buy GM AND Ford with cash, and still have nearly half their reserve left over. $191.83 billion cash on hand end of October[0], GM is 59B market cap[1], and Ford is $35B market cap.
I guess there is a premium you pay when acquiring a public company, but still astounding numbers.
Classic Apple. They dabble in various things for years until the moment is right to strike with a version 2.0 of something that others already make. Apple rarely enters the market with something that nobody has ever seen before.
Apple Watch, iPad, iPhone, and iPod... These were not the first products in their category, but they were the first to get the category truly right. This being said, I have no idea what Apple will get right about cars that others have not. But that’s the point, isn’t it. We never know ahead of time. There will just be a launch and then everything will change.
> This being said, I have no idea what Apple will get right about cars that others have not.
To the smug 2026 posters who link this thread to laugh at us: my prediction is Apple ships a clean, simplified no-frills electric car 2.0 _subscription_.
I realize that a car subscription is sorta-kinda leasing but I really wish that that there was a proper subscription car service.
I’m in the hook for gas/charging, taking it to you for service or a swap at your request, and personal liability insurance. You’re on the hook for everything else. Standard month to month or yearly for a discount pricing.
It’s one of those situations where someone other than the driver owning the car makes the incentives line up nicely. Renters have the incentive and capital to get maximum reliability from manufacturers and competition plus scale drives prices to somewhere near depreciation plus mean maintenance which is the best you can really hope to do as a consumer looking to buy.
The problem there is nothing that is truly next generation. Better batteries are designed to cost more. How much more then 400-500 miles do you need on a car?
How much faster then 2-4 seconds to 100km/h do you need.
Better quality interiors? Better then Germans? Likely not.
I guess better software is an option, but what exactly. Tesla is working on that for years.
Self driving? Well, Apple has no solution and if anybody has one by 2024 is questionable.
The problem there is nothing that is truly next generation. Better UX navigation doesn't help you find good music. How much more than 400-500 songs do you need on an mp3 player?
How much faster will a navigation wheel help you find the music you like?
Better quality online music store? Better than Napster? Likely not.
I guess better software is an option, but what exactly. Creative Labs is working on that for years.
Internal 2GB flash drive? Well, Creative has no solution and if anybody has one by 2005 is questionable.
If I was an Apple shareholder (I guess I am, indirectly through Berkshire), this would piss me off. Apple is in a very good business. Cars are a terrible business. Just compare Apple’s margins to any car company. Also, it’s really hard to move into a business that is widely outside your core competency. It can be done, but the effort is huge, and I suspect the median track record is poor.
I'm a small time Apple shareholder and have the opposite reaction. Apple is sitting on 300 billion in cash - I expect them to do something with it. They need to move into some other market because their existing ones are tapped out. Cars are a great fit:
1. Big enough market for an investment of 10s of billions
2. Its international (quit a bit of that money is stuck overseas)
3. Making electric cars isn't too hard (see Tesla)
4. Its a consumer product and they have the best consumer brand which they can easily leverage.
5. The car market is poised to be radically disrupted in the short term - electric cars/self driving cars
I don't know, I think Tesla is a good example of how difficult it is to penetrate the car market as a new company. It took them nearly 20 years to get where they are today, and it's not like that was 20 years of smooth sailing. From what I've read they came close to going under multiple times. Aren't they the first major new US car company to start up and not go under since the early 20th century?
The situation for Apple is certainly different, given their size and the massive leaps in terms of EV tech compared to when Tesla started out, but let's not trivialise the complexity of the task and the inherent financial expenditure and risk.
I think the Goal would be Uber, but with a fleet of Apple Cars. I still dont see how selling and servicing Apple Cars would work for Apple if it is sold as an originally car. That large investment and sunk cost would be a good use for its Cash. ( And it would be part of their Services Revenue ) Apple also gets to trial and gather Data with their current Map Data Collection vehicle.
The problem is there is nothing, absolutely zero indication that we can crack Level 5 self driving within next 5 years. It is always easy to get the first 80%, the last 20%, the small and minor details will often take as long if not longer than the first 80%. We have just arrived at the 80% point, and there is always the illusion of we are close to Self Driving Goal. And we are not.
And apart from that there are no indication as to how Apple is competing with Batteries. Tesla as a car manufacture may be easy to replicate, ( only on a relative scale, it is actually difficult to make cars in mass quantities, especially with Apple that demands perfection. Unlike Tesla ) but Tesla Battery is at least 4 - 5 years ahead of everyone else from both technological and manufacturing. And no have seems to have shown a plausible plan of how Apple is going to tackle this.
> Apple is sitting on 300 billion in cash - I expect them to do something with it.
“Do something with it” doesn’t have to be reinvesting within the company. Apple has been doing a good job returning excess cash to shareholders, spending roughly $250 billion since 2015 to reduce shares outstanding from 22 billion to 17 billion.
One can say many things about Tim Cook, but not that he doesn't understand "business". So if Apple makes a car, they certainly have a plan on how to make a profit from it.
Cars in the future will be different than Cars of the past. It will be a high-margin business. Exactly the same as it was with "dumb phones" to "smart phones". Esp. with semi self driving.
It's interesting that this mentions lithium iron phosphate batteries as a "breakthrough technology". That echoes what BYD in China has been saying recently.[1] Lithium-iron isn't a new technology. It was popular for industrial power tools for a while. It is safer than lithium phosphate, not being prone to thermal runaway, but has less energy density. BYD has been able to get the energy density per unit volume up, but energy density per unit weight is still lower than lithium phosphate.
The article also suggests that Apple would have a "manufacturing partner". After all, iPhones are made by Foxconn. So this may just be Apple selling BYD cars outside China. BYD sells more electric cars than anyone else, including Tesla, but has been having trouble getting into the US market. Apple can help with the marketing end.
A self driving flying consumer vehicle that is fueled by any organic material (100% clean) would be the "biggest achievement of the century".
Road/highway infrastructure would be a thing of the past. Billions (if not trillions) of dollars saved in new road construction and maintenance. Can divert federal/state/local funds to education, public health, and social programs.
Then highways can be replaced by housing infrastructure and thus slowly driving down the cost of housing in markets across the country.
Readit News
Apple is fundamentally now a company that can move immense amounts of capital into new industries with the underlying ethos of user experience. Apple Card was perhaps a dipping of the toes moment.
In theory, Tesla shouldn't be worth what it is because the tech behind it is increasingly getting commoditized (though they work hard to stay slightly ahead). But people love Tesla and it's the first choice EV because they've really thought through the UX of a semi-self driving car EV thoroughly.
Apple is just about the only company with a similar ethos and enough money and patience to be a viable competitor and have a competitive brand known for quality.
Also: insane supply-chain management chops, a skill that is more and more transferable - especially for electric cars.
For instance, logistically things are very different in the automotive space. Many, many more people are required to ship a single unit. You also have many more variables that can hold up a production line anywhere in the hierarchy because you rely on more 3rd parties for parts. While these things are also true of consumer electronics, you may rely on a dozen suppliers for an iPhone, car companies often rely on hundreds.
Materials are also very different in the automotive space. You have to build with materials that will last 100k miles driving a 80mph in all weather, day/night, freezing/scorching etc etc. It is a very long tail to cover. Apple can do it, but it will take years and many, many partners to get it done.
I'm also not sure what Apple's edge here is. At this point all I really want out of an entertainment center is a screen for my phone to plug into. Everything else is better done as knobs and buttons.
Apple does have smart people, and they obviously have a ton of cash. So they absolutely could make a play here. But to imagine that they'll walk in to a market that Tesla has been growing successfully in for a decade and be competitive out of the gate seems like a stretch.
What does that matter?
There are Car manufacturers that have basically had infinite capitalization and funding for a decade and the legal system + technology barriers just didn't move. Supply chain was never an issue.
Apple's not going to see any different results, so I am puzzled by this optimism.
When is the last time an electronic mfg had to deal with a billion dollar lawsuit because they didn't follow industry best practices for design like Toyota did after the acceleration scandal? Does Apple have experience with the NHTSB or other relevant regulatory agencies? Sure, there is a lot of gatekeeping in the auto industry, but it's for good reason. Cars can and do regularly kill people. It is not the same as making an iPhone.
They can make phones because they hire/hired experts who can make phones. I doubt they would use those same electrical engineers to design the brake systems. I don't think there's anything evidence to suggest that they couldn't acquire/hire the right talent.
Minor side note. I'm sure a lot of the experience is well-designed but I can't help but grimace every time I see that huge touch tablet instead of physical buttons on the dashboard.
Like with phones, having touch screen control everything provides extraordinary flexibility in rolling out new software features and ultimately improving UX.
Remember this design is supposed to lead the way into an FSD future achieved through purely software updates.
Whether they succeed in automating the majority of miles driven, they designed the car with that future fully in mind.
For what it’s worth, it’s one of my favorite parts of the car, and certainly it’s my kids favorite part of the car.
Mostly agree, though I suspect a few of the major car companies like Volkswagon/Audi and Toyota/Lexus are capable of this as well.
But yes, Apple has the cash reserves to not just manufacture electric cars, but to build out the necessary infrastructure network as well:
- charging stations blanketing the country
- battery replacement stations for faster "charging" on the fly
- local maintenance stations
- etc..
Apple could centralize sales to Apple's website, and transform "dealer networks" into "maintenance networks". Sales can be handled in a centralized manner, but maintenance still requires locality.
All that requires large upfront CapEx, but Apple is one of the few that has more than enough cash reserves for that.
People tend to overlook just how many service centers are available for the big three (about 10K), not even counting independent garages. Tesla has..500. How many will Apple have? If the Tesla service horror stories are anything to go by, I can only imagine what it would be like for an iCar once production ramps up.
All of these things are outside of Apple's core focus and they are unlikely to possess an advantage over other players. Sort of like automobiles.
The world is starting to feel like 1999 all over again. People's visions are getting further and further removed from reality.
Steve Jobs = Elon Musk in a different market.
Without someone in control who can make major decisions quickly, capital will not be enough for Apple.
No need to theorize at this point. Plenty have pointed out how overinflated Teslas value is at this point. It's pretty much cult of personality that is propping them up at this point. Tesla is actually very similar to Apple in that they "pioneered" a new market and that has created an identity of leadership in that market. I'm not sure Tesla is going to be able to keep up as the competition continues to grow rapidly.
From my experience, Tesla's tech (I drive a VW) is ahead of their competition pretty handily.
The new Ford Mustang Mach looks competitive, but even that is still at least 9 months away.
The VW id4 EV is sold out, and they are taking pre-orders for the next batch.
Tesla has first mover advantage when it comes to mass market EV's. It's not just cult of personality.
Was it really? Dozens of companies have credit cards. Walmart, Uber, Paypal, Venmo, Best Buy, Amazon...it didn't real strike me as big things happening when Apple announced their credit card.
The user experience of many Apple products is notably substandard. Maps, homepod, keyboard, list goes on. What Apple is good at is integration (both horizontal and vertical) and managing user perception through design.
Actually _making_ cars is doomed to be a failure. You need a massive workforce and very large factories. It is fairly low margin compared to even computer hardware let alone software. Then they have to support these cars which means you need a massive service network. It really is a bad bad idea.
Making a car with the likes of Magna is just plain stupid. You can’t get any sort of volume to make the car cheaper and get the OS into the hands of millions of drivers.
Here is what they should focus on:
1.) Sensor suite for self driving. 2.) AI computer for self driving. 3.) Main computer and screen(s) for navigation, car controls and games/audio/video apps. 4.) Autonomous software.
Work directly with automakers from the ground up and design the vehicles jointly with them to ensure the systems feel native rather than bolted on.
Also I think they and the market (investors) dont want/expect them to be a part of a supply chain.
Apple has had multiple credit cards in the past.
Edit: found this after more Googling: https://www.cultofmac.com/614988/apple-credit-card-histor/
With all due respect, I would like to articulate and counter your point with some insights.
Tesla as it stands today at ~$600B is priced at monopoly status - that they have 'won' the next decade in transportation and electrification. Whether you buy into that or not, consider the following:
- Tesla is the first (and so far only) company that has successfully been able to produce electric vehicles with positive gross margins at scale. No other competitors have scaled (yet) and EVs made from traditional automakers have been sold thus far at negative gross margins (i.e. each one that leaves the lot costs thousands or more dollars at a loss). While Tesla 'just broke out' as a stock in 2020, starting with large cash-flow generation from their factory in China - they have been working at this for well over 5 years. The real challenge for everyone making EVs is scale, and depending on how you slice it, Tesla is - really, really far ahead regarding their head start. (Model 3 was ANNOUNCED in 2016 and first cars were produced and delivered in 2017. Look at this announcement today end of 2020, and car production in 2024 - not even accounting for scale. This is really hard to do.)
- Your point about commoditized parts is valid in theory. However, as someone in the {renewables} industry who has had many first hand conversations with those buying Li-ion batteries at scale - the little talked about challenge for everyone else in automotive is 'where are you getting your batteries'? Li-ion cell manufacturers are generally broken up into Tier1, Tier2, Tier3 suppliers. From my conversations even pre-pandemic with folks - Tier 1 supplies were already allocated SEVERAL years out. Tier2 supplies are hard to acquire in large volumes as well. That leaves you with 'shitty' Tier3 supplies for which most of those cells are ending up in things like scooters and Energy Storage (not cars). And while some are good, suppliers can be tier 3 either due to small volumes or unreliability (must all be tested, and even still its questionable how many cycles you'll really get). Automakers want Tier 1. Tesla's latest event, 'Battery Day' while 'disappointing' the street and non-industry folks for not announcing some 'Million mile' or other 'groundbreaking technology' is significant because the limitation to Tesla's growth, much like others for making EVs, comes down to batteries. The factories need to be built - and for most of what optimists imagine for a rapidly changing future, many of those shovels have not hit the ground yet on the forward infrastructure. And that isn't even accounting for the fact that it takes at least 1-2 years to get a single cell factory ramped up. And we aren't even talking about the mining capacity (particularly lithium and nickel) that all of these announcements imply already exists.
And back to Tesla's valuation - there is lots of focus on their current valuations assuming they have solved self-driving. There's so much going on with Tesla as a stock (look at Tesla Semi-truck, their Energy Storage businesses for example). And the winks and nods towards launching an uber-like ridesharing service. While I am very skeptical of their ability to have self-driving 'done' in their posted timeframes, I think their value is priced that , whenever it happens - they will be first. So interpret that as you may.
When factoring in the likelihood that they will be the next apple for transportation across personal & commercial transportation for the next 1-2 decades, you can end up at 600B easily. If you are interested in seeing how, just on the driving component - Ark Invest has posted their models if you want to take a deeper read to see if you agree. [1]
And 2 cents on Apple's role & competitive advantages here: They, prior to Tesla were for a while one of the larger single consumers for Li-ion batteries (Macbook, Ipods, iPhones, etc) in electronics. Add in their expertise with battery management and longevity systems (but for systems of a smaller size) combined with their existing supplier relationships & software capabilities, if I had to bet on Apple or one of the existing automotive companies - I'd probably make my bet on Apple purely from a capabilities and competencies perspective.
[1] https://github.com/ARKInvest/ARK-Invest-Tesla-Valuation-Mode...
What numbers are we talking about here?
Tesla seems to be the most sold EV car to date, with more than 650k model 3s shipped so far. That's remarkable, but it's the same magnitude as the second on the list, Nissan Leaf, which has 500k shipped.
There's also more to electric than battery EVs. It was obvious from the start the transition to electric is real but that real scale will start out with hybrid electric for the first decade or two. Any manufacturer serious about scale would want to start in that end because in order to be good, models needs to be designed from the ground up. In comparison, Toyota has shifted 15M Priuses. That's scale.
Making cars isn't just a question of R&D, it's a question of being able to manufacture at scale and quality.
This is something that Telsa have really struggled with - as a result the reliability of Tesla cars isn't as good as it should be. Telsa need to really crack this - but it's not as easy as it seems - that's why certain car brands succeed in petrol era, and others didn't - the ability to make them well is what, in the end, separated companies.
Electric cars are fundamentally a lot simpler than try to drive the car forward with a series of controlled explosions - but the key usability challenges are:
- charging times - range
Progress is being made on both, but if somebody can really crack them, that's the game changer.
Electric vehicles aren't new, as a child my milk was delivered from an electric vehicle. https://en.wikipedia.org/wiki/Milk_float
I guess they are the company to 'try it' but really it's a monster bet.
It'd be interesting if they have an 'angle' that allows them to start small, possibly with a specific kind of public transport or closed-system solution for urban transport, with entities like Dubai (i.e. cash flush) buying in big.
Car = game console = phone = laptop
Just another platform to own, so that one might control and tax users there-on.
Which, for what it's worth, is an illustration of how our intuitions about future likelihoods aren't very good. We tend to see as implausible things that are too different from how they are today, overlooking how much things can change in a few years.
My opinion doesn't mean anything, but I think in 2030, Elon Musk will be the richest person in the world by an order of magnitude and Tesla will have the largest market cap in the world
Disclaimer - long TSLA and drive a model 3
Every other manufacturer will be licensing Tesla’s IP, IMHO.
They execute superbly, had a brilliant strategy of starting as a luxury vehicle to be the beachhead for getting an economy of scale, and were risk takers, but lets not pretend they invented the market. They didn't.
No doubt they have loads of superficial patents though, but Tesla has an open patent policy and a declaration that they won't sue, so that doesn't seem to matter much.
Apple can buy a company like Magna Int with pocket change. Recall that Magna made the "Sony" electric car, bumper to bumper (Sony put in some screens demonstrating a Sony-esque UI), because that's what Magna does -- they're the maker behind a lot of automobiles, either in part or whole. And Magna has loads of patents around the engineering of vehicles because they've been doing it for decades.
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Elon is rapidly turning into a toxic personality for (a bit more than) half the country.
It is irrepearable and components are impossible to obtain because Apple has punitive contract with suppliers.
This week assebly line workers are burning down the factory in india because of wage theft.
What in the above gives you an impression that the car they build can be trusted with the life of your family?
This fetishising of Apple has to stop, making pretty laptops doesn't mean shit when lives are at stake
Would you be excited to drive a moving vehicle designed by same company that has class-action lawsuits against many of it’s mechanical innovations: butterfly keyboard, failing screen hinges, bending iPhones, etc
On second thought, maybe Apple doesn’t actually have great mechanical engineering innovation chops.
Also, 2024 still seems aggressive to deploy self-driving for real.
I also don't think they will try for self-driving out of the gate. I know a good number of the experts in this field and no one thinks full autonomy is ready. The moat that Waymo has built with their particular kind of testing and iteration is diametrically opposed to how companies like Tesla, Lyft, Uber etc have tried to do self-driving. Even they are going to be restricted to the easiest of locals for years.
I have to strongly disagree with this. The touchscreen is great for the vast majority of things it replaces. The only physical controls I ever miss are for temperature (which is a very minor complaint) and windshield wipers (though I would also accept auto wipers that actually work). I do think the UI smoothness and touch latency could be slightly improved, and Apple would do better, but Tesla is already so far ahead of every other car manufacturer there that it's not even funny.
This is both the most functional and most beautiful design choice I've ever experienced. My favorite part of my Model 3. You quickly come to realize that voice control does everything and that you should never have to reach for a button or fiddle with climate controls, etc.
Tesla realized what all other car manufacturers failed to see, you don't need physical buttons because you don't need buttons of any kind. I'm never buying another antiquated car with physical buttons again.
I’m just hoping that they don’t relegate a lot of stuff like climate control to a Siri-only interface.
I wouldn't have minded a HUD that I could turn on and off though.
If you really want to make this fun, you don't even need to know as you can use traffic aware cruise control, a feature many cars have, to set and forget your speed on any road.
I have two issues with the UI/Human interface that Telsa has followed. First, their automatic wiper solution is dreadful and while you can instant a wipe action by pressing the button on the end of the stalk I believe the variable rate should be available on the stalk.
The second is that I think the steering wheel would be better served with buttons dedicated to cell phone use, namely accept, ignore, mute, and hangup.
However it should be noted the cars voice controls respond very well and you can easily change the temperature should you want that way, there are a lot of settings easily changed by voice but Tesla does not alert you to them.
The best way to grade their UI though is that I can muscle memory activate many features including one level down options. Of course you can just let the car drive and play with the screen all you want, something I have done to prove a point but the simple fact is...
I rarely if ever, as in nearly never, need to access anything through the screen as its all set and forget. Now I get into other cars and think, damn this has enough buttons and screens to be an airliner.
It won't be but a generation before we look back and wonder how anyone though six gauges, forty buttons, and three or more levers, were ease of operation, Not all cars will be as simple as a Tesla but the age of forty buttons is going away.
(Seriously, count how many buttons are in your car - then try to remember how often you use them)
Nobody has figured it out out yet, and a 'moat' for a market that is basically impossible to a big money-maker is not a 'moat' at all.
The quest for self driving is not the same as the quest for the first commercial deployment. Solving general self-driving is the real quest.
And I don't trust any experts to predict this correctly, as nobody knows yet what the solution actually is. Some experts say one thing, others say other things.
But they also have an extensive partnership with Waymo: https://self-driving.lyft.com/riders/
I also know that both Alphabet and GM have large stakes in Lyft. I bought stock in Lyft with the expectation that they will one day be acquired by one of their partners.
I test drove a model 3 and ... couldn't buy one because of the dash.
I think there should be - always - status in line of sight of the driver.
The model 3 dashboard in the center of the car is just a bunch of bathwater with no baby.
Some people won't care. I've had friends say they got used to it.
I can... almost... think of it like an off-road motorcycle with a handlebar and no instruments.
But personally I couldn't buy in.
Related, I think the controls on the model 3 have also been over-minimized. The scroll wheels have the feel of a $3 computer mouse, and autopilot overloaded on the gear selector is cheap, not elegant.
It also totally sounds like something Apple would do.
I think this might just come down to personal preference. After owning a Model 3 for a while now, I can't stand my Audi (or other cars) that aren't touch screens. There are far too many buttons and dials. It is overwhelming (and ugly to me). The non-touch UIs are clunky and confusing and often far more distracting for me as I try to figure them out.
There's room for more than one car company like this. If Apple brings high quality, tight fit and finish, elegant design, software focus, vertical integration (including their new M1 processor tech), logistics support (charging station network, maintenance, etc), and "next-level batteries" to the mix, then I'm sure they'll find space in the market.
If Apple can execute with electric cars as they've executed with consumer electronics, then they'll be competing not just with Tesla, but directly with Audi, BMW, Mercedes, Lexus, etc.
I don't know if Apple's quality is going to translate to cars either unless they poach a bunch of people. Safety features will compromise the quality at some point, but maybe they're good enough to work around it elegantly.
Plus people paid a premium for Apple's quality, but are they willing to do so when that premium is multiple thousands of dollars extra for a car? They could afford low/zero cost financing if they wanted to.
Tesla is still far from that. I've yet to meet a tesla owner who's car just "Works" without any issues or fiddling.
GM's & Nissan's EVs fit that bucket. But they are designed as "buget" cars and dont evoke a desire from buyers to be excited about them on a day-to-day basis.
Honestly, if Apple bought out the existing non-Tesla charging networks and dedicated even a sliver of their UX talent to improving the charging experience, they would really push things forward. This is, of course, assuming that buying the charging networks would make it past the anti-trust people.
In the car market, being a different brand is a differentiator. Ferrari, McLaren, Bugatti, Lamborghini, and Porsche don't offer vastly different products. But the car market is heavily driven by people wanting something different from their friends. Once Teslas become popular enough, people will want something else just to be different.
Extremely good build quality? Accessories notwithstanding, most of their products look and feel like they were built extremely well.
Even their failures like the butterfly keyboard looked and felt like they were built to extremely tight tolerances.
Instruct an engineer to design something that is not crap and they will do it, and it will be mass produced with tight tolerance if specified like that. On the manufacturing side... Apple does not manufacture anyway.
And that brings me to: a car is not exactly the same thing as your small household appliance. Like we saw with Tesla, it is not trivial to do with a good build quality, both on the design front and on the build front (way more difficult than small and mostly static objects) -- and it is harder to reject a car with a not stellar build quality because that's more expensive and a huge part of the value is in the mechanics. And quite related: for now Apple does not manufacture, if they start to do cars, will they? Otherwise who will?
I bet they support CarPlay, at least :). I have CarPlay on all my cars excdept for my Tesla, and it still annoys me. I won't buy another Tesla that doesn't support it.
It'll only work with an iPhone.
Really? Why are you not curious what the differentiator of all the car companies out there is? Why don't we just have one car company?
(Hint: There is so much demand, so many different tastes, budgets and features and regulation, that a single company will never serve all of them. Tesla is a niche product and I for one would never buy one)
The iPhone was special in the regard that there simply was NO competition. We are not talking EV vs combustion (which was Tesla's main step, and even still, everyone knew EVs would work and how they work, but nobody was ready to fully commit to them yet). We are talking horses vs. cars. Apple managed to establish themselves in a market that most companies didn't even think exist...
So no comparison here. All Tesla has done is make EVs more approachable and "cool" for the masses. However they have literally ZERO differentiator compared to established car companies. They are going to tank so hard stock wise in the next 10 years that investors will wonder what hit them.
> they have literally ZERO differentiator compared to established car companies. They are going to tank so hard stock wise
Their stock is insanely overvalued, no argument there. But they have one of the largest installed and fastest growing DC charging networks, software that doesn't suck, and the most capable and fastest improving driver assist system enabled by a proprietary custom ASIC. That's far from "ZERO" differentiators, especially in a world where other manufacturers keep faceplanting on their software efforts over and over again.
I can imagine a dystopian future with custom non-standard parts, specialist repair centers, restrictions on what you can do with it, Apple being able to track everywhere we go, what we listen to, who is with us, and establishing a network of devices that work together but not with other brands. And that's just their phones, imagine their cars!
I mean, a lot of the recent right-to-repair controversy in the US has been centered around farmers, and their ongoing battles against machine producers / makers like John Deere.
The gist is that you can't do jack sh!t on a modern John Deere, because all the software involved to diagnose/modify/operate their machines are strictly proprietary, and only available to the company, or authorized dealers and repair shops.
Here's how this could work with personal cars:
Let's say you purchase a Apple Car, and after a month the low washer fluid message starts flashing. Not only does it flash, but every 10 minutes or so it interferes with your whole media system, with some voice stating that you need to fill up on washer fluid.
Turns out your washer fluid level is actually OK, seems to be some sensor error, or bug in the software.
Problem is - you can't touch the car, mechanically or the software. Any modifications will essentially brick the car.
Only way to get this error fixed, is to bring the car to some Apple repair shop, where a tech will fix the problem in 30 seconds, and bill you $1000 for the work.
Other than the bricking part, that's the kind of stuff farmers are experiencing with quite expensive machines.
They started doing that with iPhones.
There are lots of reasons why you might want to stay inside the walled garden. The higher the value of the car, the stronger they become.
I feel like people pretend that building a car is way harder than it actually is in 2020.
All the components to build a car are readily available. A person can buy the parts on their own and put them together in their garage. It isn't like they have to go get a pick axe and start mining ore to create everything from scratch. Apple just needs to buy the components that already work, and then do what they do best and perfect that parts that haven't been perfected. In this case, the battery, the motor, the onboard computer, and the software. And based off what Apple has built in the past, these are the things that Apple would be REALLY good at.
It isn't like they have to invent tires and drive shafts.
I know I undersold the difficulty of making a car in this comment, but come one, Apple is 87 times more valuable than Ford. They have enough cash on hand to buy Ford 5 times. Money might not solve all problems, but it really really helps.
Which one? I mean, even a Tesla has over 40 computers on the CAN bus. Cars may look simple when they just have a touchscreen interface, but they're really a small network of computers that can be driven. Engineering, and then building a car is really hard. Tesla has proven an upstart can do it, but they've been at it almost 20 years and Musk himself says it is very hard to build cars.
I'm sure Apple can do it if they put the resources in, but they're less than 1000 people deep at this point. 1000 people is a small department working on something you've never heard of at a large automaker. I don't even mean top secret stuff, I just mean day-to-day shit that most people don't think about, like drafting repair routines for each possible thing that can go wrong that someone in the field needs to fix in a timely manner. You take your car into get repaired and only 2-3 people may touch it, but that's nothing compared to the hundreds of people that worked on the information and software that those 2-3 people used to fix your car.
Not to mention the different software that is running in all of the 40+ computers in the car... or the hardware and software that's used to communicate with/diagnose problems with/update those computers.
Even after the car is engineered, it takes over a year to then engineer all of the tooling, equipment and processes that will be used to mass produce that car, put that tooling in place, configure it, test it, train people to use it, etc.
Modern cars are marvelous machines, and there's a nearly unbelievable amount of effort that goes into designing, building and repairing them.
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Apple can do it if they really want do, but lets not pretend it is easy.
As Gruber quipped - “This car is as smart as Siri” sounds like a threat, not a selling point.
Going all-in on something like this when you're not ready is just a waste of capital and nobody wants to be the next Fisker. Historically speaking, Apple has usually made sure all their ducks are in a row before launching something, whether it's going into processor design, audio, or launching a credit card. There's quite a bit of chess pieces that were put into position first, and a lot of that was done via hiring, acquisitions, and partnerships. That should demonstrate that Apple has gotten into other industries regardless of how much management or shareholders previously understood the problem. In other words, they seem to understand when they don't understand.
With BMW declining to be a partner all those years ago (allegedly), it makes sense to me that they would put their plans on the back burner. I'm still skeptical that they can (or want to) do this without a major manufacturing partner, but we'll see. Or, given how conservative they seem to be with their capital, maybe we never will. The AirPods Max project allegedly started 4 years ago, and those are just headphones.
Or beyond their hundreds of billions of dollars in cash to hire a team needed to deliver on this.
Then how can Elon Musk pull it off with only 50%?
Also, I'm just a guy on the internet, I really hope Cook sees this and decides to spite me and build an awesome car, I'm also a dreamer.
I guess there is a premium you pay when acquiring a public company, but still astounding numbers.
[0] https://www.cnbc.com/2020/10/29/apple-q4-cash-hoard-heres-ho...
[1] https://www.google.com/search?q=GM+market+cap
[2] https://www.google.com/search?q=Ford+market+cap
Apple Watch, iPad, iPhone, and iPod... These were not the first products in their category, but they were the first to get the category truly right. This being said, I have no idea what Apple will get right about cars that others have not. But that’s the point, isn’t it. We never know ahead of time. There will just be a launch and then everything will change.
To the smug 2026 posters who link this thread to laugh at us: my prediction is Apple ships a clean, simplified no-frills electric car 2.0 _subscription_.
I’m in the hook for gas/charging, taking it to you for service or a swap at your request, and personal liability insurance. You’re on the hook for everything else. Standard month to month or yearly for a discount pricing.
It’s one of those situations where someone other than the driver owning the car makes the incentives line up nicely. Renters have the incentive and capital to get maximum reliability from manufacturers and competition plus scale drives prices to somewhere near depreciation plus mean maintenance which is the best you can really hope to do as a consumer looking to buy.
How much faster then 2-4 seconds to 100km/h do you need.
Better quality interiors? Better then Germans? Likely not.
I guess better software is an option, but what exactly. Tesla is working on that for years.
Self driving? Well, Apple has no solution and if anybody has one by 2024 is questionable.
Apple is likely not gone compete on price.
So not sure what the angle is here.
The problem there is nothing that is truly next generation. Better UX navigation doesn't help you find good music. How much more than 400-500 songs do you need on an mp3 player? How much faster will a navigation wheel help you find the music you like?
Better quality online music store? Better than Napster? Likely not.
I guess better software is an option, but what exactly. Creative Labs is working on that for years.
Internal 2GB flash drive? Well, Creative has no solution and if anybody has one by 2005 is questionable.
Apple is likely not gone compete on price.
So not sure what the angle is here.
As in, “yes it technically can place and receive calls but that is the most boring thing that it does.”
1. Big enough market for an investment of 10s of billions
2. Its international (quit a bit of that money is stuck overseas)
3. Making electric cars isn't too hard (see Tesla)
4. Its a consumer product and they have the best consumer brand which they can easily leverage.
5. The car market is poised to be radically disrupted in the short term - electric cars/self driving cars
I don't know, I think Tesla is a good example of how difficult it is to penetrate the car market as a new company. It took them nearly 20 years to get where they are today, and it's not like that was 20 years of smooth sailing. From what I've read they came close to going under multiple times. Aren't they the first major new US car company to start up and not go under since the early 20th century?
The situation for Apple is certainly different, given their size and the massive leaps in terms of EV tech compared to when Tesla started out, but let's not trivialise the complexity of the task and the inherent financial expenditure and risk.
Why can't they just pay it out to shareholders and let them figure out how to invest it?
The problem is there is nothing, absolutely zero indication that we can crack Level 5 self driving within next 5 years. It is always easy to get the first 80%, the last 20%, the small and minor details will often take as long if not longer than the first 80%. We have just arrived at the 80% point, and there is always the illusion of we are close to Self Driving Goal. And we are not.
And apart from that there are no indication as to how Apple is competing with Batteries. Tesla as a car manufacture may be easy to replicate, ( only on a relative scale, it is actually difficult to make cars in mass quantities, especially with Apple that demands perfection. Unlike Tesla ) but Tesla Battery is at least 4 - 5 years ahead of everyone else from both technological and manufacturing. And no have seems to have shown a plausible plan of how Apple is going to tackle this.
“Do something with it” doesn’t have to be reinvesting within the company. Apple has been doing a good job returning excess cash to shareholders, spending roughly $250 billion since 2015 to reduce shares outstanding from 22 billion to 17 billion.
The auto industry has historically been a low margin, low volume, high capital investment industry with significant government subsidies.
He understands business perfectly, but does he understand product?
Apple's not going to go into cars unless it's confident of being able to make equivalent margins.
That's the entire point.
Buying 40% of Tesla would have been a drop in the bucket for Apple, and it would have already payed off big time.
The article also suggests that Apple would have a "manufacturing partner". After all, iPhones are made by Foxconn. So this may just be Apple selling BYD cars outside China. BYD sells more electric cars than anyone else, including Tesla, but has been having trouble getting into the US market. Apple can help with the marketing end.
[1] https://youtu.be/dIt5z4wT9RE
https://asia.nikkei.com/Business/Automobiles/Foxconn-aims-fo...
Tesla and others are already using LFP as well btw.
> So this may just be Apple selling BYD cars outside China.
In this case BYD would not just be a "manufacturing partner". Apple would simply be selling an OEM product.
Being successful at building another electric car would be certainly interesting.
Being successful at building a self-driving car would be one of the biggest achievement of the century.
Road/highway infrastructure would be a thing of the past. Billions (if not trillions) of dollars saved in new road construction and maintenance. Can divert federal/state/local funds to education, public health, and social programs.
Then highways can be replaced by housing infrastructure and thus slowly driving down the cost of housing in markets across the country.
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