Apple Aiming to Begin Electric Car Production in 2020

[scottsjack]

I just want a faster MacPro.

Not much chance of that. Corporate culture-wise Apple has been out of the computer business for a while now.

Sure, they still make some really great ones but there is not a lot of effort being made to produce useful, serviceable machines. It's pretty much just a rehash of Apple content-friendly, previous models with Ive's fetish for thin-regardless-of-the-consequences.

 

[guzhogi]

But will it "bend" around a corner?

Your comment reminded me of this:

 

[Menel]

A minivan? Don't think so...

Wagons and Crossovers are very popular these days.

They are essentially minivans in style and function.

 

[AppleScruff1]

There's no such thing as a perfect product.

Also, the Apple following isn't such a big number of people. Yes, back in 1996, when Apple was going downhill, the people who stick with Apple even though the products were not that good, could be considered a following. There probably weren't more than a couple million people who were devoted. I doubt that number today is much different. The people who stay in lines during product launches (half of them scalpers), and the ones who frequent websites like macrumors, may be called a following. But Apple has hundreds of millions of users now. The big majority of them do not even know who Tim Cook is. So I don't think we can call these people a following. The cult portion is nowadays a tiny portion.

I understand your point, but I still think a lot of people buy Apple because of the Apple brand. For example, someone knows very little about smartphones, but they know iPhone, it's made by Apple. I hear the term iPhone used like Kleenex is used for tissue and Xerox for copying, even though people are referring to a product, no a brand. That is quite powerful brand recognition.

 

[Elbon]

They provide a direct consumer experience. Providing part in other people's experience would go against this grain totally. That's why carplay is not a totally good experience, it is not the Apple experience.

Maybe - but Apple still isn't going to build a car. So the question is - what are they building?

 

[winston1236]

That's the good part. Once it's released they'll make a new model every year that makes you have to sell the old one so that you can have the latest technology. JK.

Now we'll be able to hear all the owners of other car brands tell us how they had <insert feature> in their car two years ago, and we'll be able to hear all the diehard owners of apple cars defend themselves to the death.

A new one that makes you buy new to get certain features? How is that any different than car manufacturers the last century?

 

[Tycho24]

I just want a faster MacPro.

I like peanut butter. Can you swim?

 

[bulletmarks]

I mean look at GE, they started with lightbulbs, now they have airplane engines and NBC. Whats next? iBrianWilliams?

 

[AppleScruff1]

Tesla`s last quarter profit margin was 25%
GM`s last quarter profit margin was 5%

Does that help?

Source? I haven't read anywhere that Telsa had an operating profit. And GM founded Saturn. Check their revenue when they did.

 

[doelcm82]

I bet that in 20 years, it will be only the older generation that know how to actually 'drive' cars. Most cars then will be self-driving. It's like the stick-shift today, most younger people have no clue how to drive a stick-shift. (At least in the US - when I've visited Europe, I always get a stick-shift rental car, it seems they're still popular there)

I see that with a lot of things today, not just cars. I work in a school, and so many kids have horrible handwriting. Plus, so many of them don't know how to write a street address, or even how to read an analog clock.

I have horrible handwriting, and I went to school in the 1970s. But I hardly ever write anything, so it's not much of a handicap. A few years back a guy made a comment about my signature, and how they didn't teach penmanship any more. He was working behind a checkout at a supermarket, and I had a nice job in an working with computers and traveling the world and getting paid a whole lot more, so I let it pass.

In a few years, "actually" driving a car won't be a skill most people need. Kids today don't learn how to shoe a horse, whittle a nib for a writing pen, use a slide rule, or make lye soap. When they grow up, they'll complain that their kids don't know how to do basic things like type with their thumbs.

 

[OtherJesus]

Samsung to begin car manufacturing in 2019

 

[DudeDad]

Me: "Siri, please drive to mom's house"

Siri: "I can't find anything on 'apple sauce'"

Me: (slowly) "Please drive to mom's house"

Siri: "I found 7 listings for 'Tom's Blouse'"

Me: "where's my Uber app...."

 

[OllyW]

Samsung to begin car manufacturing in 2019

They started making cars in 1998.

 

[phillipduran]

I am still skeptical about Apple jumping into car manufacturing. I see this more like developing other tech relate to cars than actually a car.

I'm excited. If they approach it like they do their other products, todays car manufacturers are probably getting nervous. That and scrambling to make sure their copiers are working.

 

[HobeSoundDarryl]

For Apple (or Tesla) to invent the electric car we'd have to go back to the 1800s (maybe Apple invented the time machine ;-). The main reason the electric car failed back then.... You guessed it. Batteries! Same problem as now (only even worse).

Historical facts never gets in the way of crediting Apple with inventions around here. That was the joke I was trying to make. If one can pile up enough historical evidence that it becomes difficult to spin Apple as original creator, the credit-assigning shift will become "...but Apple is the one that got it right". Counter that and be barraged with "...but who makes the most profit" and/or "XX million buyers of Apple's <version of whatever>" and so on.

Again, just making jokes about how all of this kind of thing usually goes. However, I would personally be very excited for Apple to take on improving upon cars. Finally, a big innovation that does not involve a variant screen shrink or screen expansion of iDevices! Personally, I lack excitement about the watch but I can certainly be excited about an attempt to out-Tesla, Tesla.

 

[RDStrong]

I wonder if they're doing it as a proof of concept to see if it is viable. Because even for Apple designing and manufacturing cars seems like a potentially expensive misstep.

 

[Jim]

something else from China

I really hope not...

can't help but wonder who would be assembling this thing? If China (clandestine attempt to break into the US market) it would be a deal breaker for me. Also, right now you would have a bunch of them in limbo off of the West Coast.

 

[HobeSoundDarryl]

Maybe - but Apple still isn't going to build a car. So the question is - what are they building?

The iPad (magic) carpet- an iPad so big, you can sit on it and fly it around town.

But it still comes with 4 x 5 rows of maximum "flatter" 2-color icons (which are touted as "modern" in the tech press), no side-by-side multitasking and with entry level units of only 16GB.

Ohhh, and they'll completely jettison the battery in the name of "thinner" so it won't function without a battery case (sold separately), which will only hook to it via a proprietary Lightning 3 connector.

All

 

[HobeSoundDarryl]

can't help but wonder who would be assembling this thing? If China (clandestine attempt to break into the US market) it would be a deal breaker for me.

Made in Mexico. Parts from China. Designed in California.

"Shut up and take my money"

 

[carrrrrlos]

You’re not driving it right.

 

[Keirasplace]

can't help but wonder who would be assembling this thing? If China (clandestine attempt to break into the US market) it would be a deal breaker for me. Also, right now you would have a bunch of them in limbo off of the West Coast.

Most cars sold in the US are assembled in the US even by foreign car makers. Doesn't mean the car electronics Apple would put in there would come from the US though. Just like not all parts in current cars assembled here come from the US.

----------

Apple would need total control of the dash. That's why CarPlay sucks right now. Will auto manufacturers let Apple own their dashboards? That's the question.

I'd say no they won't in general. For the same reason cell phone OEM insist on customizing Android. They don't want to lose control of their product and how it is differentiated from others.

So, that alone will make it more likely for Apple to do their own thing.

 

[Zeos]

I wonder how the gray screen of death, the beachball, and the overnight reboots will manifest themselves in the iCar! That would be great to be sitting at a stoplight and have to wait for the beachball to resolve itself.

 

[2bikes]

Source? I haven't read anywhere that Telsa had an operating profit. And GM founded Saturn. Check their revenue when they did.

1. I quoted marginal profits. It is different then operating profit. They are 2 different concepts. I recommend you read about the difference. Revenue is also something different.
2. Marginal profits, operating profits, revenues etc, are always reported during quarterly results (for publicly shared companies). It is not hard to find. You can go to Yahoo finance and look at their results by quarterly, yearly, etc.
I got my results from ycharts.com if you like.
3. What does my argument of `could be profitable when produced in US` has to do with Saturn? As of now, GM makes less money per car then Tesla.

 

[theluggage]

The infrastructure grew as more people got cars, and the early adopters planned their trips more carefully.

...fine, but our expectations of car travel have evolved along with that infrastructure. Electric cars released today have to compete with a well-developed gas-driven infrastructure that grew up over decades.

There are also fundamental problems:
1. Teslas can have decent range because they're large cars with plenty of floor area to hold the battery, and are built with expensive lightweight materials and techniques. Matching that in an affordable, compact car is going to be tough.

2. Tesla are probably getting cheap/free land for their charging network because Telsa owners are wealthy and shopping malls, restaurants etc. like the idea of attracting a few wealthy people. If EVs become mass-market then the charging stations are going to have to start earning their rent. Tesla-style free charging is probably unsustainable.

3. Charging takes, say 5-10 times as long as filling with gas. That means people are going to go off shopping, eating etc. and probably leave their cars taking space at the charging station for even longer . The current style of recharging station - with a couple of chargers in a car park or a filling-station-style forecourt - only works when EVs are rare. If EVs take off, then you're going to arrive at the charging station to find all the bays occupied and the owners off having lunch somewhere. Charging stations will have to evolve into parking lots with half the bays wired up (and a consequent parking battle between EV-users and gas-burners) - probabkly meaning that sites will need their power feed upgraded, too.

4. "But people will charge overnight and only need recharging stations occasionally so we won't need the current capacity...." Well, maybe if they can charge at both ends of a trip. I have a drive and garage - so I could charge at home, but I can't guarantee that my destination will have parking with a power point in range... so even on a 100 miles-each-way trip in a 200 mile range car I'm going to need to stop for a recharge to be safe. Also, I don't know about the US, but in the UK filling stations along major routes (especially motorway service stations) already charge a hefty premium: you don't set of on a half-empty tank if you can possibly fill up at a local supermarket first. Yet the motorway service stations still do a roaring trade. If EVs take off, its going to be the need for supermarkets and local filling stations that goes, not the ones on major routes.

Remember, they didn't even have mobile phones to call for help if they ran out of gas.

In the UK, you just had to make sure that you broke down within walking distance of an AA Box (Note for Americans: AA=Automobile Association, not the other AA!). And the motorways have emergency phones at walking-distance intervals.

or carried a gas can and a good pair of walking boots in their "boot".

...which is another option you don't have with electric vehicles.

 

[ScepticMatt]

Long time lurker, just registered for this. Hi there.

Source? I haven't read anywhere that Telsa had an operating profit. And GM founded Saturn. Check their revenue when they did.

Depends on if you count GAAP or non-GAAP. Biggest difference between GAAP and non-GAAP is that for GAAP they can only book a part of new car revenue because of lease accounting and resale value guarantee, even if they already got the full money and that's what they use for their business strategies.

Anyway. They were only GAAP profitable in Q1 2013 ($11,248M)
But there are mostly non-GAAP profitable:

Q4 2014: $16,214M loss
Q3 2014: $3,174M profit
Q2 2014: $16,127M profit
Q1 2014: $17,015M profit
Q4 2013: $45,920M profit
Q3 2013: $15,935M profit
Q2 2013: $26,284M profit
Q1 2013: $15,424M profit

Source: http://ir.teslamotors.com/events.cfm

So, more or less a black zero non-GAAP net income since the Model S launch. They invest all their cash flow back into further growth.

As for gross margin:

Our Q4 financials reflect this delivery shortfall, one-time manufacturing inefficiencies related to the introduction of P85D and Autopilot functionality, and the impact of the strong dollar. Even though the dollar has continued to strengthen by over 7% versus the euro in 2015, we believe we will be able to sustain a non-GAAP automotive gross margin of about 26% in Q1 by stabilizing production to improve manufacturing efficiencies. Without the sharp increase in dollar strength, Q1 gross margin would be about 28%. Tesla serves an international market and has a global supply chain, but most of the Model S is built in North America, so a strong dollar has a slightly negative net effect on profitability.

Source: http://ir.teslamotors.com/secfiling.cfm?filingID=1193125-15-44423&CIK=1318605

Tesla doesn't include SGA costs in gross margin, giving them a book advantage compared to other automakers.
(Selling, general and administrative cost, i.e. dealer cost)

As for Saturn:

Cheerleading is nice, but more substantive changes are at work. To ensure that dealers make a profit selling small cars without haggling, Saturn built a gross margin of 17% into sticker prices, vs. an average 12% for competing model

Source: http://www.bloomberg.com/bw/stories/1992-08-02/may-we-help-you-kick-the-tires

Edit: btw, lithium "issues" are way overblown. Lithium are only a tiny mass and cost fraction of lithium-ion batteries.