- Apple may not pursue a partnership with a big automotive company, Bloomberg reports.
- The company could use a contract manufacturer to assemble its cars, while sourcing its own parts.
- Foxconn and Magna International could be likely partners for an Apple Car, per Bloomberg.
- See more stories on Insider’s business page.
Apple is considering working with a contract manufacturer to find its own car pieces and assemble them, a strategy that wouldn’t involve a partnership with an automotive company, according to a new Bloomberg report from Mark Gurman and Gabrielle Coppola.
If it decides to go that route, the tech company would be employing a similar strategy to its approach to iPhone manufacturing, and one that would leave out big-name car companies, which Apple has been talking to in recent years.
Over the past few months, there has been a lot of speculation regarding which company Apple could choose to partner with in the development of its first car, which is codenamed Project Titan.
In December, Reuters reported Apple was planning to release an electric self-driving car by 2024, but Apple car speculation dates back to 2014.
This year, Apple’s talks with major automakers appear to have reached a stalemate so far, but Bloomberg says contract manufacturers Foxconn and Magna International are top contenders for a potential Apple car partnership.
Apple has been in talks with several companies including Hyundai and Kia. Bloomberg reports the company even met with Ferrari last year, but that the talks didn’t lead anywhere. A deal with a major automaker would require Apple to convince a big-name car company to manufacture a product that could end up being a major competitor to the carmaker’s own offerings, which Bloomberg reports has been a tough sell.
If the tech company employed a similar tactic to its iPhone manufacturing process, it would be able to avoid building its own factories and would be able to source its own material, all while avoiding relying on a potential competitor.
Magna was reported to have been in talks with Apple when the company first expressed interest in creating a car years ago. The manufacturing company also assembles cars for several car companies, including BMW.
On Tuesday, BMW’s Chief Financial Officer Nicolas Peter told Bloomberg that he’s not worried about competing with Apple.
If the tech company launched an electric car it could cut into other automaker’s margins, including Tesla. The car, entitled “Project Titan” would allow Apple a slice of a $10 trillion market, according to Morgan Stanley.
In January, analysts at Morgan Stanley said an Apple car could also potentially bring financial ruin, especially if the company follows its current business model, which is more vertically integrated than many other car companies.