Apple’s Future-Proof Car

Ah, the Apple Car. It’s a rumor so old and so unconsummated that it’s entering the mythical realm of the Apple Television.¹ But it’s not there yet, and that’s largely because there clearly have been various huge projects (aka “Titan”) throughout the years within Apple working on a car or car technology of some sort. There’s way too much smoke for there not to be fire.² And yet, we’ve yet to see the fire.

It also has long made some amount of sense. Almost six years ago, when arguing why it would be weird if Apple wasn’t working on a car project, I called out the fact that Apple was running out of industries where the revenue could actually move their needle. Automobiles is certainly one of them.³ That doesn’t mean it’s not insanely daunting and perhaps the biggest logistical challenge Apple has ever undertaken. But those are the types of things Apple can and seemingly likes to solve. Tim Cook used to eat such challenges for breakfast. Now he may snack on them during a quick lunch with Jeff Williams and Doug Field.

Anyway, the rumor was back again this past week with a report from Stephen Nellis, Norihiko Shirouzu, and Paul Lienert for Reuters:

Apple has progressed enough that it now aims to build a vehicle for consumers, two people familiar with the effort said, asking not to be named because Apple’s plans are not public. Apple’s goal of building a personal vehicle for the mass market contrasts with rivals such as Alphabet Inc’s Waymo, which has built robo-taxis to carry passengers for a driverless ride-hailing service.

Now, is this latest report 100% accurate? Who knows. We’re so far out from that would-be launch date (or is it just a start of production date?) — over three years away — that even if this is fully accurate right now, so many things will change between now and then. And even this report couches things noting that production — not shipping — could slip until 2025!

And then in comes often accurate analyst Ming-Chi Kuo noting that the timetable for Apple’s car project is more like 2025 at the earliest, and maybe more like 2028 or later.⁴ And like that, we’re back in science fiction territory.

To be clear, while such timetables seem to run a high risk of approaching vaporware status, I think it’s fine to work within such boundries given what we’re talking about here: the production of a full automobile. It has already taken a ton of time, it will take a lot more time.

And one big reason for that: I tend to think the only thing that makes sense for Apple to do here is build and ship a full car, not some underlying system to be used by other car makers, as has been rumored in recent years.⁵ This is Apple. Apple makes products consumers buy and use.

Later on, in the Reuters report:

It remains unclear who would assemble an Apple-branded car, but sources have said they expect the company to rely on a manufacturing partner to build vehicles. And there is still a chance Apple will decide to reduce the scope of its efforts to an autonomous driving system that would be integrated with a car made by a traditional automaker, rather than the iPhone maker selling an Apple-branded car, one of the people added.

If we’re talking about the earlier ends of the timetables above, undoubtedly, Apple would have to partner to assemble the car so as to avoid “production hell” as Elon Musk famously talked about with regard to the Tesla Model 3. I’m sure Apple would prefer to do everything themselves, and will probably get there eventually if and when they do make their own cars, but they do have a history of partnering first in varying degrees, of course.

But again, I don’t believe that last part above will be true. I just don’t see them developing some system other car-makers use in their cars. Or at least, I don’t believe that will ultimately be the primary driver of Apple’s car project.⁶

I’m reminded a bit of the Rokr, the failed Motorola phone which Apple partnered on to feature iTunes. That was quickly scrapped for the iPhone, of course. Would Apple do a “Rokr Car” at first to test the market? I just don’t see it. Or I do, but it’s already out there: it’s called CarPlay.

Beyond that, the most interesting bits of the report:

Central to Apple’s strategy is a new battery design that could “radically” reduce the cost of batteries and increase the vehicle’s range, according to a third person who has seen Apple’s battery design.

And:

Apple’s design means that more active material can be packed inside the battery, giving the car a potentially longer range. Apple is also examining a chemistry for the battery called LFP, or lithium iron phosphate, the person said, which is inherently less likely to overheat and is thus safer than other types of lithium-ion batteries.

“It’s next level,” the person said of Apple’s battery technology. “Like the first time you saw the iPhone.”

Creating some new killer technology that alters the state of the art does seem like a very Apple thing to do. And the battery element (pun intended) could be just the thing. Everyone knows that Tesla got to where they are leading the electric car revolution by essentially using laptop batteries in tandem. Who knows how to manipulate and maximize laptop batteries better than anyone? Apple.

Not that they would use the same batteries, of course (nor does Tesla anymore). What they’re talking about above sounds like some new breakthrough. No less than Musk himself is intrigued (but confused and seemingly skeptical) about this. But again, you could envision a world in which Apple cracks some sort of code here — and, as with the M1 chip, their work on laptops/phones at scale could feed into this project and vice versa, making all the products better — and that plus the obvious design and user interface elements combines to create one killer product.

Not a “Tesla-killer”, mind you. This obviously won’t be a winner-takes-all market and by the time Apple came to market — if Apple comes to market — Tesla would have an immense scale advantage.⁷ But those other guys who gave funny quotes five-plus years ago may be in for some bumps in the road.⁸

My two favorite from back then — just to keep them top of mind for 2030 or whenever —from former CEO of General Motors, Dan Akerson:

I think somebody is kind of trying to cough up a hairball here. If I were an Apple shareholder, I wouldn’t be very happy.

And

“We take steel, raw steel, and turn it into car. They have no idea what they’re getting into if they get into that.”

“They’re not just going to walk in!” No, but they could drive in!

The question, really, is when?

¹ Not the Apple TV set top box. And not the Apple TV app. And not the Apple TV+ service, but an actual television set. As in, a massive screen that would be built by Apple.

² Also, you can’t throw a rock in Silicon Valley at this point without hitting someone who has worked on the project themselves. Plus, Apple has had cars on the street to test their autonomous driving tech. It’s legitimate, but it has also legitimately been rebooted or restarted a number of times. Hence, no car. Yet.

³ Television sets? Not so much…

⁴ While Kuo clearly has excellent supply-chain sources — which are obviously going to be important for a project as large and all-encompassing as a car — his timetables are often off. This shouldn’t be surprising, things shift all the time and especially when we’re talking about seven or eight years out, it’s impossible to pinpoint a date, I imagine.

⁵ I recognize that no less than Tim Cook has given on-the-record quotes about autonomous driving systems being core to Apple and “the mother of all AI projects” — but that was also over three years ago. Again, things change — and often have with this project.

⁶ And yes, I acknowledge that various reports over the years — and in a way, Cook’s quote above — have implied Apple would just build the underlying tech. To me, that reads as if their first few attempts at the whole shebang didn’t work out, so they were looking for a way to commercialize the technology they had built. But if the Reuters reports is to be believed, they’re back to the whole shebang plan.

⁷ Though I am curious how this is looked back upon in ten years time…

⁸ Previously heard giving such quotes about Tesla ahead of the Model 3 launch. Fast forward a few years, and Ford’s market cap stands just under $35B. GM’s is just under $60B. Tesla’s is just under $630B.