Why apple will never build its own car

Rumors persist that apple could launch its own e-car. But strategically there is a lot to be said against it.

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Rumors that apple is working on its own car have been around since 2014. At that time, the highly respected engineer and developer johann jungwirth surprisingly switched from mercedes to apple. But the project "titan", as it is called internally, never really got off the ground. Jungwirth left apple after just one year. And he wasn’t the only top executive to turn his back on the project. Apple confirmed little in the years that followed, except that they were working on software for autonomous vehicles. In addition, the company wants to further develop its own infotainment system, carplay.

In 2018, apple registered nearly 30 autonomous test vehicles in california, which have since been seen regularly on the roads. But in 2019, apple first drastically reduced the number of employees who worked on the project, and then in the summer, the startup drive.Ai to buy.

A car can’t replicate the "iphone moment"

In the last few days, the rumors about apple’s e-car have picked up again. The reason for this is a $200 million investment by apple’s supplier foxconn in the failed carmaker byton. This is to get byton back on its feet and finish building the almost finished production facility in nanjing. Wouldn’t byton be ideal to build an apple car?

Why apple will never build its own car

The real question should be: why does apple want to build a car at all?? Sure, apple has already surprised several times. For example, when it unveiled the iphone in 2007, it turned an entire industry on its head. But while apple was able to run phone manufacturers into the ground with new technologies, it won’t be so easy to do the same with cars.

And why would apple buy a company like byton that has not yet produced a single e-car?? it would make more sense to join an established manufacturer. Tesla, for example, would be an ideal partner, but elon musk tweeted that he had offered to buy his company from apple a few years ago – but the latter’s boss tim cook had shown no interest.

Supplier market is much more attractive for apple

designing a car and the software is one thing. To build it and put it on the road, another. The margins for the vehicles are low, unless you get into the upper class with vehicles from a purchase price of 100.000 euros. With a new iphone, you earn more and faster money than with an investment in an autonomous car. Even if cost should not be an issue given the funds available to apple, the stock market is not convinced by such experiments, as initial analyses revealed.

Why apple will never build its own car

it would be much easier for apple to be a supplier. Similar to google or nvidia, who sell their software to manufacturers and are very successful with it, apple could offer a complete software suite. Which would include the infotainment system and autonomous driving. On the one hand, this would keep development costs within reasonable limits, and on the other hand, it would avoid the risk of failing to produce one’s own car.

Don dahlmann has been a journalist for over 25 years and has been working in the automotive industry for over ten years. every monday you can read his column "drehmoment" here, which takes a critical look at the mobility industry.

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