Road to Apple's electric car future could be lengthy and winding, analysts say

Apple's plans to build up an electric car could take a bit longer to spark into lifestyle than the enterprise is anticipating, however the gadgets giant could acquire specific niche market technology firms to speed up it has the arrival, analysts said.

Reports emerged the other day that Apple, one of the world's most effective companies, is likely to produce its first electric powered vehicle by 2024.

“Apple car specifications have yet to come to be finalised … it won’t be surprising if the vehicle's release timeframe is pushed out to 2028 or later on,” Neil Campling, co-mind of Mirabaud Securities’ Global Thematic Group, told The National.

“There is a large amount of uncertainty about the suppliers, specifications and in addition about Apple's own competitiveness in the EV and self-driving market … even if development starts this season and goes as per the plan, it would take years to get all of the requirements set up,” he added.

Apple secretly commenced its automated and electric power vehicles development - referred to as Project Titan - found in 2014. The business has but to publicly discuss some of its automobile goals, but practically 5,000 engineers and scientists were reported to be focusing on the project by 2018.

“There have been rumours that Apple was focusing on a car a few years before ... rumours are circulating again, it probably ensures that they have realized some breakthrough. That’s good news and points in the route that the car is something that possesses been actively done,” Abbas Ali, managing editor of TechRadar Middle East, advised The National.

The Covid-19 pandemic has increased the focus on making the automobile industry greener. With Tesla joining the S&P 500 index this month, some industry analysts say EVs happen to be place to dominate the global car market. President-elect Joe Biden’s triumph in the US elections and China announcing strategies to improve the sector bode well for the sector, as will the European Union's roll out of a fresh Sustainable and Smart Flexibility Strategy that envisages 30 million zero energy autos on its roads by 2030.

The EV share of global car sales is forecast to go up to 2.5 % by 2020, from 1 % in 2017, regarding to Bank of America Merrill Lynch, which predicts that EVs will constitute 90 per cent of sales by 2050.

Apple’s modus operandi suggests it'll acquire tiny technology players to greatly help accelerate its EV development but the core of its system is likely to be “home-grown”, analysts said.

“It won’t be considered a surprise if indeed they [Apple] have already acquired some businesses to increase the manufacturing process … but it’s anybody’s guess if they will actually have something showing,” said Mr Ali.

Ming-Chi Kuo, an analyst at Hong Kong’s TF International Securities, believes the marketplace is “too bullish” on the Apple car, indicating that its rollout could take until 2028 or in the future.

“We believe that the current so-called Apple car principle stocks are just speculations by the market , nor involve genuine Apple car suppliers,” Mr Kuo, who keenly follows Apple, wrote in a research note to clients.

“We also feel that because EV/self-driving car technical specs remain evolving, it is prematurily . to talk about the final specs of the Apple car,” he added. He also said Apple may already be too far behind in artificial cleverness to start a competitive self-generating car.

“We are extremely sceptical that Apple will in actuality create a car, as auto sector profitability is a lot lower,” Citi analyst Jim Suva wrote in an email last week.

Apple is facing stiff competition in the electric car market not merely from dedicated EV maker Tesla but also from automotive giants want Audi, BMW, Volkswagen and General Motors.

Germany's Volkswagen ideas to roll out 22 million EVs within a decade and almost 70 new electric models by 2028.

BMW this week said it really is aiming for 20 % of its vehicles to be electric power by 2023.

Different tech giants, such as Amazon and Google owner Alphabet, are likewise backing autonomous-electric initiatives but are more centered on mass transport.

Alphabet’s Waymo is operating a commercial self-driving taxi program, whereas Amazon-backed Zoox is attempting to create an autonomous ride-hailing fleet. Market analysts said Amazon may possibly also use automated cars to deliver goods to customers.

Tesla, which is looking to sell 500,000 EVs in 2020 - a good 36 per cent increase from last year, may have acted while the “poster kid of EV technology but will probably remain a distinct segment player” in the industry, analysts said.

Often the initially mover in market is not the eventual champion, Mr Campling said.

“We have seen this before in other technology, such as Kodak cameras, Blackberry smartphones, Excite and Lycos for web search and Netscape web browsers,” he added.

In the past year or two, Apple has hired key executives from Tesla to propel its autonomous and electric automobile initiatives.

Doug Field, who caused Apple between 2011 and 2013 before moving to Tesla, returned in 2018 seeing that vice president of particular jobs. Steve MacManus, another Tesla veteran, joined Apple as a senior director in July 2019.

Before this month, Bloomberg reported that Apple shifted the leadership of its self-driving car job to John Giannandrea, its senior vice president of equipment learning and artificial cleverness strategy.

EVs will be a “very different territory” and “not at a big enough” marketplace for Apple, Naeem Aslam, chief market analyst in brokerage Avatrade, said.

“Typically, a person travels 30 miles a day in an automobile whereas a person runs on the phone for over several hours per day. The telephone industry is large for Apple to continue to innovate and be on the forefront,” Mr Aslam informed The National.

"Somewhat, diversification could be very successful but margins [in the auto industry] aren't that great.”

Mr Aslam believes Apple is much more likely to spouse with a recognised EV company than develop its own vehicle.

“It’s likely that it'll partner with a provider such as BMW or perhaps Tesla and create industry dominance by merging functions. A second alternative will be outright investing in a company top rated on the EV front side.”