Apple could reportedly make the Apple Car without a big-name automaker as negotiations hit speed bumps

Tim Cook
  • 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.

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Apple is reportedly nearing a deal to build its autonomous electric car with Hyundai

Tim Cook
Apple is near closing a manufacturing deal with Hyundai Motor Group, CNBC reported.

  • Apple and Hyundai are nearing a deal to build an electric car together, CNBC reported Wednesday. 
  • The Apple-branded car would be built at Kia’s plant in Georgia, the outlet reported. 
  • Sources told CNBC that the deal isn’t done, and Apple may partner with another automaker. 
  • Visit the Business section of Insider for more stories.

Apple is nearing a potential deal with Hyundai Motor Group to build a self-driving electric vehicle of its own, CNBC’s Phil LeBeau and Meghan Reeder reported Wednesday, citing multiple sources familiar with the project. 

If finalized, the EV will be Apple-branded and built at Kia’s assembly plant in West Point, Georgia, CNBC reported. 

Sources told the outlet that the deal isn’t done yet, and that Apple may decide to partner with another automaker either instead of, or in addition to, Hyundai. 

As for specifics about the car itself, one source told CNBC that Apple’s cars won’t be built to have a driver and that they’ll be geared toward “the last mile,” indicating that the vehicles may be commercial in nature. 

Apple’s stock jumped more than 2% on the news in after-hours trading. 

Rumors have circulated for years about Apple’s potential plans to build an EV, and speculation has intensified in recent months. 

In December, Reuters reported that Apple plans to launch a self-driving electric vehicle as soon as 2024, citing unnamed sources familiar with the tech giant’s plans. Sources told the outlet that the vehicle would not be a commercial vehicle or a self-driving taxi, but a consumer vehicle instead. Instead of competing with robotaxi firms like Waymo, Apple would more likely rival electric carmakers like Tesla and Rivian. 

The future vehicle would utilize Apple’s own advanced battery technology, which has the potential to “radically” diminish charging time and increase range, one source told Reuters.

Hyundai declined to comment when reached by Insider. A spokesperson for Apple did immediately respond to Insider’s request for comment.

This story is developing…

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Apple’s market value grows by $102 billion after report says the company aims to produce electric cars by 2024

Tim Cook
Apple CEO Tim Cook.

  • Apple climbed as much as 4.7% on Tuesday following a Reuters report on Monday afternoon that said the tech giant aimed to produce electric cars by 2024.
  • The company wants to compete in the electric-vehicle market with battery innovations to improve vehicle safety, packaging, and range, according to the report.
  • The news, published less than an hour before markets closed, lifted Apple to a 1.2% gain on Monday.
  • Apple’s market cap grew by more than $102 billion at intraday highs.
  • Watch Apple trade live here.

Apple gained 4.7% on Tuesday following a Reuters report on Monday that said the iPhone maker planned to produce electric cars by 2024.

The tech giant aims to compete in the rapidly expanding electric-car market with new battery technologies to improve vehicles’ safety and range, according to the report. That could “radically” cut down on battery costs, a source familiar with the plans told Reuters.

Apple’s market value grew by more than $102 billion at intraday highs.

Read more: Brooke de Boutray beaten 99% of her peers over the last 5 years and runs a fund that is up 148% in 2020. She shared with us 4 stocks she’s most bullish on heading into 2021.

The report, published less than an hour before markets closed, lifted Apple shares to a 1.2% gain on Monday. Tesla, which would likely serve as Apple’s greatest competitor in the automotive sector, extended losses and closed 6.5% lower.

Sources told Reuters that Apple planned to partner with other companies for some vehicle systems. Suppliers of lidar sensors rallied in early trading. Apple developed its own lidar sensors for the iPhone 12 Pro and iPad Pro models.

The report revived discussions of Apple’s Project Titan automotive plan after layoffs and a leadership shakeup spurred rumors that the project had died.

The company plans to incorporate a “monocell” design to concentrate battery cells and create more space in battery packs by doing away with various storage pockets, Reuters reported. The layout would allow for denser battery units and a longer range than layouts with more loosely packed cells.

Apple is also experimenting with lithium-iron-phosphate battery chemistry, which could be less likely to overheat than lithium-ion batteries, Reuters reported.

Read more: BANK OF AMERICA: Buy these 16 medtech stocks with strong fundamentals that are set to soar post-pandemic

But even Apple’s expertise in handling massive supply chains would likely be tested by vehicle production. Tesla spent nearly two decades building cars before turning a steady profit. Apple would need to collaborate with a slew of partners and venture into manufacturing processes not used for its existing hardware.

“If there is one company on the planet that has the resources to do that, it’s probably Apple. But at the same time, it’s not a cellphone,” a person who worked on Project Titan told Reuters.

Apple closed at $128.23 on Monday, up 76% year-to-date. The company has 75 “buy” ratings, 18 “hold” ratings, and three “sell” ratings from analysts.

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