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2015-06-04

Auto Industry Responds to Prospect of Apple Electric Car

Auto Industry Responds to Prospect of Apple Electric Car

There's mounting evidence that Apple wants to go beyond car-based infotainment solutions, like CarPlay, to building an Apple-branded vehicle.

The dust has settled on revelations from nearly a month ago that Apple could be working on its own branded electric car. It’s fascinating to watch the dominant media spin on electric cars shift from “low gas prices killing EVs” to “an Apple electric car could be huge.” Apple continues to remain quiet on its plans. Regardless of Apple’s true intent regarding the car industry, the computer giant’s hiring of hundreds of automotive engineers gives new legitimacy to electric connected cars as the future of automotive transportation.

While electric cars have generally been dismissed as an ultra-niche product—less than one percent of sales, etc.—the entry of Apple, Google, Uber, Baidu into the space shows just how early we are in the evolution of cars from big chunks of standalone hardware to highly connected battery-powered mobility devices. (This is not to say that electric cars can’t be cool or even sexy, as Tesla has proved.)

A new chapter in the EV story is being written. We won’t know how it will shake out for at least a few years, probably well into the next decade. But we can already see the death of misconceptions that today’s range-limited electric cars will remain the province of well-heeled green-leaning Technorati on the coasts.

Folks who follow the EV world—and who pay attention to Tesla’s various programs, BMW’s i products or the Chevy Bolt 200-mile concept—already knew this. The news about Apple’s possible development of an electric car will wake up everybody else to the bright, and highly unpredictable future, for electric cars. Fasten your seat belt.

Survey of Auto Exec Reactions

The idea of “disruption” is casually tossed about. It’s hard to disrupt an industry as entrenched as automotive. But we can start to read the tea leaves based on how the titans of the car industry are responding to Apple’s “Project Titan,” the name of its car project (whatever it is).

Nissan: “When Apple says they are going to come with an electric car in 2020, that's good news for us,”said Carlos Ghosn, Nissan’s chief executive, at the Mobile World Congress in Barcelona last week. “They are not competitors, they are allies," said Ghosn. “It's not about the biggest share of electric cars.”

Fiat-Chrysler: “Apple has credibility and much more capacity to finance itself than any car producer,” said Sergio Marchionne, chief executive of Fiat-Chrysler. “But I wouldn’t underestimate the ability of the car industry to respond and adapt to the provocation…Am I concerned? I’m always concerned. I’m concerned about somebody of that caliber playing the disruptor role.”

BMW: “We are in regular talks with companies from the IT and telecommunications sector, including Apple, concerning topics like connected vehicles,” a BMW representative in Frankfurt told Reuters. “Developing or building a car is not a topic of these discussions.”

General Motors: “I would be highly suspect of the long-term prospect of getting into a low-margin, heavy-manufacturing [business]," said Dan Akerson, the former head of General Motors, according to Automotive News. “A lot of people who don't ever operate in it don't understand and have a tendency to underestimate…We take steel, raw steel, and turn it into car. They have no idea what they're getting into if they get into that.”

Daimler-Mercedes “I do not know the strategy of Apple. It is not that easy for me to understand why they would be interested in entering the auto industry," said Dieter Zetsche, chief executive of Daimler, at the recent Geneva Motor Show. “Whether we might work together in cooperation, or as competitors, we are open,” he told CNBC from Switzerland.

Zetsche added:

“I don't see a battle, but I do see a huge opportunity by these two worlds converging between the automotive industry and the tech world on the West Coast, if you want. There are tremendous new opportunities: the connected car, the autonomous car, the very safe car: all of these opportunities are lying ahead of us, and we will exploit them in any form.”

See also: If Apple gets into the car business, its biggest competitor won't be Tesla





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