It would be completely bizarre for Apple to actually be getting in to the automobile manufacturing business. I suspect this has much more to do with ancillary technologies like batteries, navigation, autonomous navigation, deeper auto integration, etc. Way too much of a departure from the core technology business.
I thought so, too, but with the number of hires from the automotive industry and the backgrounds these people have ("senior powertrain test engineer"), I'm less sure.
There are lots of plausible explanations, though. It's far from certain that Apple are considering building a car, and if they are what stage it's at. Does Apple have an ultra-experimental R&D department analogous to Google X? Perhaps that department is exploring cars (and Apple as a whole is far from committed), and the scale of the hires has simply been exaggerated. Perhaps they're working on new manufacturing tools and processes for updated versions of existing products.
You're right that it is too much of a shift. Not just in terms of product, but in terms of business models. Apple Stores aren't equipped to sell or demonstrate cars. Apple would need to essentially build dealerships, and then they'd face the same troubles Tesla did when trying to sell their cars directly to consumers. Tesla is just totally banned from direct sales in some states and in others (such as NY and Ohio), they have dubious deals where existing stores are allowed but new ones are banned. Even if Apple sorted this out, would it be worth it? The automotive industry already has a clear and established premium market, and even in that segment margins are much lower than Apple is used to (about 12-15%). Can Apple really get a higher margin on a car than Ferrari?
It really shouldn't happen. Apple would be much better served by continuing with consumer electronics.