In Depth

Apple Car: will the tech giant build an electric car?

Mysterious prototype vans spark new rumours that Apple is working on a self-driving car

Rumours that Apple is working on an electric car are not new, but they have grown in intensity following sightings in the US of vans bristling with mysterious technology registered to the California-based tech company.

Not everyone agrees that the high-tech vehicles prove that the Apple is preparing to launch a car, but many publications claim to have insider information that "proves" the rumours are true. So what do we know so far?

What is Apple up to?

Apple is pushing its team to produce some kind of vehicle by 2020, Bloomberg says, citing "people with knowledge of the matter". Some reports say that the firm is hoping to build an electric vehicle; others say the vehicle it builds will also be self-driving.

How do we know?

We don't know for certain, but Apple board member Mickey Drexler said in an interview that before his death in 2011, Steve Jobs had been thinking about trying to build a car. "Steve Jobs, if he had lived, was going to design an iCar," said Drexler. "I think cars have an extraordinary opportunity for cool design."

The suggestion is backed up by recent sightings of unusual camera-mounted prototype vehicles registered to Apple. Two videos, one taken in California and one in Florida suggest "the top-secret project is more widespread than first thought", the Daily Mail says. 

More concrete evidence comes from Apple-watching site 9to5Mac, which says that the company has hired a series of automotive engineers, many of them from Tesla. "The majority of employees on this list that are reporting to team leader Steve Zadesky come from an automotive hardware background and many only joined Apple recently or around the time Cook reportedly approved the electric car project," it says. 

Who's their competition?

According to The Economist, there are many other tech firms that are aiming to produce automated vehicles. In February Uber began opened a laboratory in Pittsburgh to develop self-driving taxis. Sony has a new start-up called ZMP which aims to produce a self-driving car; and Google has had a driverless car in the works for years.

What challenges would they face?

Apple has a strong reputation for breaking into new industries, having previously launched hugely successful forays into music distribution and mobile phones, while carving out whole new segments like tablet computers. But manufacturing cars is "enormously expensive", the Wall Street Journal says. "A single plant usually costs well over $1 billion and requires a massive supply chain to produce the more than 10,000 components in a car". Apple is known to have deep pockets, of course, but huge costs present an immediate hurdle for any firm hoping to move into automotive manufacturing.

Why would a tech company want to make a car?

There are two reasons companies in Silicon Valley are interested in producing cars, the Economist says. The first is that high-tech self-driving cars are "already altering the industry" and many tech firms feel it is an areas in which they can compete. And the second is that traditional carmakers themselves "look vulnerable", due to a combination of "chronic overcapacity, hefty legacy costs and a spate of damaging recalls", the publication adds. "Only time will tell" if Apple really is working on a motor vehicle, says Boston.com, but "the possibility sure is exciting".

Would an Apple Car threaten established car-makers?

Many industry insiders are sceptical. Dan Akerson, a former chief executive of General Motors, warned Apple that trying to break into the motoring market would come with significant risks. "If I were an Apple shareholder, I wouldn't be very happy," Akerson told Bloomberg. "I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing [industry]. A lot of people who don't ever operate [in the car industry] don't understand and have a tendency to underestimate. Look at the margins of an iPhone versus a car, I'd rather have the margins associated with the phone and produce 74.5 million of the devices."

And traditional manufacturers are also taking great strides, says The Economist. "Despite a reputation, once richly deserved, for sloth in adopting new technologies, most big carmakers are pouring resources both into battery power and other alternative forms of propulsion, and into automated driving." They, rather than Apple or another insurgent, are in pole position to develop the car of the future, it says.

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