Absolutely. I'm not very familiar with the landscape in Monterey. Maybe it's a great location. Although there are forests in Monterey (including Los Padres and of course Monterey National Forest) I was mostly thinking of NC. The east coast is dense with trees. Living here I forget what California calls a forest. Maybe it is just scrubland. I've been looking for survey maps. If I find anything I'll be sure to post.
OK so I'm intrigued by this story, I've been reading here for several years but have just signed up so I can post.
Others seem to want to compare Apple to Tesla. Fair enough, here's my take:
Musk seems like a really smart guy, fine. But I don't see a whole lot in Tesla that can't be replicated by some smart folks at Apple.
From (albeit) quick research, Tesla looks to have spent the following in R&D (plus unknown amounts before they went public, but use your extrapolation skills):
2009: 19.28MM
2010: 93MM
2011: 208.97MM
2012: 273.97MM
2013: 231.97MM
2014: 464.79MM
6 year total: 1,291.88MM
So just this last quarter, ending 27 Dec 2014, Apple had net profits of 18 billion.
I don't see any reason why Apple--if they chose to do so--couldn't take a week's worth of that cash (or $10 or $20 billion for that matter) and plow it into an electric car program that may allow them to take a leadership position in the market, within maybe five or ten years.
I give Musk and his team fair credit--they really have done a great job and produced a wonderful car. (I believe in home/work charging, and the supercharger network to me is meh.) But when you boil it all down, it's mostly battery technology (commodity), DC motors, command & control electronics & software, and of course a bunch of ancillary electrical/mechanical subsystems that are rather mature: steering, braking, suspension, body, occupant safety etc. Yeah there's more cutting-edge systems like collision avoidance and whatever... and I don't mean to make light of the complex systems engineering effort it takes to design and integrate everything into a top-notch vehicle; again, I think Tesla's done a great job.
But could Apple give Tesla a run for it's money? I say yes, without a doubt, absolutely. Apple is an effing cash cow, they have the competencies and resources--cash, engineering, design, manufacturing, sales, distribution, finance, operations--to pull off entering the electric car market, and in my opinion, most likely grabbing a major chunk of it within 7 to 10 years.
Could they succeed? Definitely. Will they try? Maybe... my thinking is why not? One thing I would bet my last dollar on: they haven't made the hires they've made so that they can do CarPlay better or so that the iPhone can start your car with TouchID; that sort of thing is relatively trivial. I think they've got something bigger in mind, and I don't see why that can't/won't be an Apple car.
Let's just be realistic for a moment - IF true - this can't be anywhere in the near future. A few hundred people isn't enough to magically design and prototype a car from scratch, and you can be sure that this won't be a 'clone' - it'll have something quite unique if they're going this far.
I find far more likely that they'll buy up various components / do deal (aka why they were talking to Tesla a couple of years back) with a 3rd party and then customise the heck out of it, particularly where it comes to the electronics/user interface. Aka the platform isn't going to be ? -it's bound to come from a known Auto. Not that ? would necessarily mention this overtly.
Apple excels at integrating complex hardware and software systems. Although the software embedded in cars has significantly increased, it is not yet of the same order of magnitude as a smartphone. Of course, the presence of (limited) safety critical functions somewhat corrects the picture, but my guess is that an Apple move in this area would only make sense if accompanied with totally new, software supported functionality.
I do not believe in driverless cars, because people like to drive, and because the cost of developing such critical functions would be prohibitive, at the level of security required.
In fact the only interest of the driverless car is that the person formerly driving would be bombarded with unlimited advertising, instead of driving, which I fail to consider as a progress for humanity, whatever the point of view.
GM and Ford have been making cars for more than a hundred years, as have many other companies. It is, frankly, quite silly to think that Apple could just jump into such a competitive and complex business and achieve greater efficiencies than companies that have been refining their design and manufacturing processes for decades.
Right. .GM and Ford, so efficient one almost went bankrupt and the other is in not so great shape. Fanstastic.
Lets look at how Asian Makers emerged.
- Toyota wasn't really shipping volume cars until post 1950. First cars in the US 1957, but no big world wide success until 1966 with the Corolla. By 1974, the Corolla was the #1 car sold world wide (before it really sold well in the US). Took 20 years to get to sell #1 car.
- Honda started started a moto maker (and they've been #1 at that since 1959) and only had success as a car maker when they Civic came out in 1972 (1963 is when they first started to make cars). So, one decade selling cars to big success, though they had a big experience in engines.
- Nissan is the oldest of the Japanese makers by history (they merged the makers of the Datsun in 1934). The Datsun 510 in 1967 was their first big world wide success.. Mostly an Asian maker until they emerged in 1967.
- Huyndai came in pretty late. Its first cars were in 1967, but were not really succesful until the Pony Arrived in 1975; Their first big hit was the Sonata in 1988. You could say heavy industry and car making are similar... But I wouldn't say so. Quality Abysmal until the 1990s.
- Susuki had their first decent (I wouldn't call it big) success with the Cultus/Swift launched in 1983 (they didn't have much word wide volume until the late 1990s). Started selling cars in the 1970s, before that a motocycle maker. About 10 years to selling decent amount of cars.
- SAIC, mostly sellls in China and near countries. didn't sel much of anything until early 2000s.
- Mazda had to be saved twiced from bankruptcy (1921 and 1975). First decent success RX7, but its the Miata that really is its first widely known volume car (1988) (and still sold).
- Subaru. First cars in the 1950s. First decent success Subaru 1000 in 1972, next one Legacy in 1988. About 15 years to decent success.
Most Asian cars came from outgrowt of Companies :
- Heavy Industry (Subaru(Fuji), Toyota (Toyoda), Nissan, Hyundai, Mazda
- Motocycle Makers (Honda, Susuki)
SAIC (Only one that started as Auto maker)
Seems it took 10-15 years from them starting cars to producing widely sold cars. Though, to be fair, none of those companies had Apple's world wide brand recognition or financial clout (Except maybe Huyndai, Toyota), which all were very large and well known in their home countries at least).
Quote:
Originally Posted by spliff monkey
How is 14% a high margin? And don't give me BS THAT 28% of a $200 iPod is less than 14% of a $50k car. Dollars to donuts. 28% of $50k worth of iPods is still more than 14% of $50k worth of 1 car.
Those are net margins, their high end car makers gross margins are about 25-30%.
If Apple sells 1M (not a huge number, that's number #18 in car makers) cars at 60K cars with 30% gross margins 18K per car (70 times the gross margin of a Iphone with an ASP of $650).
That's 18B in gross profits. Not shabby at all, even by Apple's.
As for the rest of the rant, go and look at the net profit in every industry and you'll see why investing in high end car makers is not such a bad place to be, compared to other industries (except those like Banking and oil, were they seemingly just print money).
Since Apple usually do things a little bit differently, it's quite fun to speculate what they might be up to. Maybe this isn't for a product you can actually buy. Maybe this is sort of an Uber/Taxi/car-pool replacement, only with automated electric vehicles owned and operated by Apple. In Europe, it could use Bus/taxi lanes and would operate on a sort of car-pooling basis in that multiple passengers could be accommodated per trip. All summoned, booked and paid for via your iPhone of course. That's why it's a mini-van. It could also replace those communal city bike schemes.
Another model would be for quiet after-hours automated goods delivery to businesses. The deliveries would be robotically offloaded into purpose built secure storage modules, perhaps something like a sophisticated Parcel Motel in built up areas. A lot of city traffic congestion is caused by white vans.
Apple would of course own and operate the solar farms that recharge their little fleet. The profit margin is in the service and in the elimination of human labour.
Absolutely. I'm not very familiar with the landscape in Monterey. Maybe it's a great location. Although there are forests in Monterey (including Los Padres and of course Monterey National Forest) I was mostly thinking of NC. The east coast is dense with trees. Living here I forget what California calls a forest. Maybe it is just scrubland. I've been looking for survey maps. If I find anything I'll be sure to post.
Agreed.
From what I've read, they were burning all the wood for 170 acres of forest. The residents complained about the 24/7 smoke that was wafting into their yard and Apple changed gears and decided to mulch everything instead when it got reported on the news. It really is a tough call. Sure, the process of making parts of solar panels creates a byproduct called "silicon tetrachloride" that is toxic but do the means justify the end? Tough call. If they used electricity produced by coal power, they get lambasted for supporting dirty energy but by using solar panels, they kind of balance out (or come out favorably to the maintstream population who don't realize the production chain costs).
I think Apple has the right idea but I'm with you Spliff, I would like to see Apple go into an area where none of the other tech companies are right now. Nuclear energy. I'm also a big supporter of it because getting people to "use less" is not something that is in North American culture. We always want more and are not willing to sacrifice anything of benefit to get it. I'm guilty of it myself. Getting a company like Apple behind nuclear technology would be a huge win because they could leverage their reputation to get it accepted by the general population.
On topic (FWIW), Apple getting into this area is a good thing. Google and Tesla have been good for the industry and have laid a lot of groundwork but Apple will learn from what they did and improve on it. Competition is good and Apple likes to compete so you know the other companies (especially the old school car companies) are going to have to step their game up. It also might just be the design to have a Google like mapping vehicle for them to improve their map app.
I'd be surprised if Apple designed the car itself. That sort of work can be more economically farmed out to Italian design houses. Lots of automakers even, do this. They must imagine they have some talents that can be of use making the car self-driving.
"Korea’s Samsung, better known for flat panel TVs, Galaxy smart phones and other gadgetry, wants its name removed from cars produced by Renault in Korea. “We want to take our brand ‘Samsung’ out of Renault Samsung since we don’t have anything to do with the car sales,” a Samsung executive told The Korea Herald.
Samsung Motors was established in 1994 when Samsung Chairman Kun Hee Lee wanted to branch out into carmaking. Lee soon learned an expensive lesson.
When first cars rolled off the line in 1998, Korea was hit by the Asian financial crisis. Samsung Motors was put up for sale and Renault bought a 70 percent stake for $560 million in September 2000. It was decided to keep the Samsung brand, which had more standing in the Korean market than Renault. There is a license agreement that allows the carmaker to use the Samsung brand through 2020.
Renault Samsung is not doing so well. Last year, its sales dropped 9 percent. In the first quarter of this year, Renault Samsung was the worst performer among the Korean carmakers."
A large part of the cost in building cars comes from the headcount. Tesla employs about 10,000 people and they have to work a lot of overtime:
"In December, at the height of its efforts to achieve a 20,000-vehicle annualized production rate, workers were averaging something like 68 hours a week, Musk said (and also participated in). Obviously, that's expensive in terms of paying additional overtime wages, and can lead to employee burn out if sustained. "The amount of overtime required to achieve 400 cars per week was pretty extreme. That has improved pretty dramatically," Musk said. That number is now down to about 50 hours a week and should drop to the mid-40's sometime next month, Musk said."
The component cost is another area:
"Another area where Tesla is achieving large cost savings is in its supply chain. As a startup, suppliers didn't offer Tesla the same sort of deals they might to an established OEM. They used industry estimates of 1,500 units per year – rather than Tesla's figure of 20,000 – to set pricing. That's now changing and, as the company meets certain volume targets, the prices (particularly for the all-important battery cells it's sourcing from Panasonic) are falling to more reasonable levels."
Here it says the batteries cost under 1/4 of the car price:
If battery capacity shoots up to double, they can cut the weight, the price, possibly charging time. Musk said in the above link they're aiming for 25% gross margins. Improving margins shouldn't be too hard if the product is good enough.
$40k car with 5% gross margins = $38k cost. Same car with 30% gross margins (Mac margins) would be $54k.
If they made the production line efficient and cut the cost of batteries in half, that would bring the retail price down to maybe $45k. You'd easily pay 20% more for an Apple car.
GM manages over 9m units per year, Tesla is aiming for 55k this year:
Apple has the cashflow to pull off making a car with volumes between Tesla and GM. The other aspect of batteries is home power. A set of batteries in the home plus solar panels on the roof can power a home permanently without the grid or gas and possibly free vehicle fuel.
A home would use about 10kWH per day, an electric car would use about the same. Solar can provide about 5kWh per day depending on the size and efficiency of the panels but efficiency improvements in each area could get pretty close to completely clean energy.
The driverless part seems like an unnecessary distraction that could be added in later on. Investing in electric cars would be great. I can see why they wouldn't partner with Tesla because who gets the profit? They'd effectively have to buy Tesla out for ~$30b but they are profitable so don't need to be bought out. I'd rather they worked together but business doesn't always allow this to happen.
Let's just be realistic for a moment - IF true - this can't be anywhere in the near future. A few hundred people isn't enough to magically design and prototype a car from scratch, and you can be sure that this won't be a 'clone' - it'll have something quite unique if they're going this far.
I find far more likely that they'll buy up various components / do deal (aka why they were talking to Tesla a couple of years back) with a 3rd party and then customise the heck out of it, particularly where it comes to the electronics/user interface. Aka the platform isn't going to be ? -it's bound to come from a known Auto. Not that ? would necessarily mention this overtly.
I thought I read Cook approved 1000 employees for this project. That's far more than a few hundred.
"Another area where Tesla is achieving large cost savings is in its supply chain. As a startup, suppliers didn't offer Tesla the same sort of deals they might to an established OEM. They used industry estimates of 1,500 units per year – rather than Tesla's figure of 20,000 – to set pricing. That's now changing and, as the company meets certain volume targets, the prices (particularly for the all-important battery cells it's sourcing from Panasonic) are falling to more reasonable levels."
Even thought it's a new industry for Apple, I would bet Apple could get deals on pricing without having to prove themselves as a car maker.
There's quite a bit more evidence than that. Just one of them is that you don't hire the head of R&D at Mercedes for too many purposes. Helping design a car is a pretty obvious one of them.
R&D is not the same as vehicle design, manufacturing or engineering. In this case, the executive hired is very young.
Comments
Agreed.
OK so I'm intrigued by this story, I've been reading here for several years but have just signed up so I can post.
Others seem to want to compare Apple to Tesla. Fair enough, here's my take:
Musk seems like a really smart guy, fine. But I don't see a whole lot in Tesla that can't be replicated by some smart folks at Apple.
From (albeit) quick research, Tesla looks to have spent the following in R&D (plus unknown amounts before they went public, but use your extrapolation skills):
2009: 19.28MM
2010: 93MM
2011: 208.97MM
2012: 273.97MM
2013: 231.97MM
2014: 464.79MM
6 year total: 1,291.88MM
So just this last quarter, ending 27 Dec 2014, Apple had net profits of 18 billion.
I don't see any reason why Apple--if they chose to do so--couldn't take a week's worth of that cash (or $10 or $20 billion for that matter) and plow it into an electric car program that may allow them to take a leadership position in the market, within maybe five or ten years.
I give Musk and his team fair credit--they really have done a great job and produced a wonderful car. (I believe in home/work charging, and the supercharger network to me is meh.) But when you boil it all down, it's mostly battery technology (commodity), DC motors, command & control electronics & software, and of course a bunch of ancillary electrical/mechanical subsystems that are rather mature: steering, braking, suspension, body, occupant safety etc. Yeah there's more cutting-edge systems like collision avoidance and whatever... and I don't mean to make light of the complex systems engineering effort it takes to design and integrate everything into a top-notch vehicle; again, I think Tesla's done a great job.
But could Apple give Tesla a run for it's money? I say yes, without a doubt, absolutely. Apple is an effing cash cow, they have the competencies and resources--cash, engineering, design, manufacturing, sales, distribution, finance, operations--to pull off entering the electric car market, and in my opinion, most likely grabbing a major chunk of it within 7 to 10 years.
Could they succeed? Definitely. Will they try? Maybe... my thinking is why not? One thing I would bet my last dollar on: they haven't made the hires they've made so that they can do CarPlay better or so that the iPhone can start your car with TouchID; that sort of thing is relatively trivial. I think they've got something bigger in mind, and I don't see why that can't/won't be an Apple car.
Just my $0.02
Let's just be realistic for a moment - IF true - this can't be anywhere in the near future. A few hundred people isn't enough to magically design and prototype a car from scratch, and you can be sure that this won't be a 'clone' - it'll have something quite unique if they're going this far.
I find far more likely that they'll buy up various components / do deal (aka why they were talking to Tesla a couple of years back) with a 3rd party and then customise the heck out of it, particularly where it comes to the electronics/user interface. Aka the platform isn't going to be ? -it's bound to come from a known Auto. Not that ? would necessarily mention this overtly.
Anything that still uses inflatable wheels isn’t really the sort of innovation for which Apple would go.
In the same way they would never make a phone that used radio waves.
Apple excels at integrating complex hardware and software systems. Although the software embedded in cars has significantly increased, it is not yet of the same order of magnitude as a smartphone. Of course, the presence of (limited) safety critical functions somewhat corrects the picture, but my guess is that an Apple move in this area would only make sense if accompanied with totally new, software supported functionality.
I do not believe in driverless cars, because people like to drive, and because the cost of developing such critical functions would be prohibitive, at the level of security required.
In fact the only interest of the driverless car is that the person formerly driving would be bombarded with unlimited advertising, instead of driving, which I fail to consider as a progress for humanity, whatever the point of view.
GM and Ford have been making cars for more than a hundred years, as have many other companies. It is, frankly, quite silly to think that Apple could just jump into such a competitive and complex business and achieve greater efficiencies than companies that have been refining their design and manufacturing processes for decades.
Right. .GM and Ford, so efficient one almost went bankrupt and the other is in not so great shape. Fanstastic.
Lets look at how Asian Makers emerged.
- Toyota wasn't really shipping volume cars until post 1950. First cars in the US 1957, but no big world wide success until 1966 with the Corolla. By 1974, the Corolla was the #1 car sold world wide (before it really sold well in the US). Took 20 years to get to sell #1 car.
- Honda started started a moto maker (and they've been #1 at that since 1959) and only had success as a car maker when they Civic came out in 1972 (1963 is when they first started to make cars). So, one decade selling cars to big success, though they had a big experience in engines.
- Nissan is the oldest of the Japanese makers by history (they merged the makers of the Datsun in 1934). The Datsun 510 in 1967 was their first big world wide success.. Mostly an Asian maker until they emerged in 1967.
- Huyndai came in pretty late. Its first cars were in 1967, but were not really succesful until the Pony Arrived in 1975; Their first big hit was the Sonata in 1988. You could say heavy industry and car making are similar... But I wouldn't say so. Quality Abysmal until the 1990s.
- Susuki had their first decent (I wouldn't call it big) success with the Cultus/Swift launched in 1983 (they didn't have much word wide volume until the late 1990s). Started selling cars in the 1970s, before that a motocycle maker. About 10 years to selling decent amount of cars.
- SAIC, mostly sellls in China and near countries. didn't sel much of anything until early 2000s.
- Mazda had to be saved twiced from bankruptcy (1921 and 1975). First decent success RX7, but its the Miata that really is its first widely known volume car (1988) (and still sold).
- Subaru. First cars in the 1950s. First decent success Subaru 1000 in 1972, next one Legacy in 1988. About 15 years to decent success.
Most Asian cars came from outgrowt of Companies :
- Heavy Industry (Subaru(Fuji), Toyota (Toyoda), Nissan, Hyundai, Mazda
- Motocycle Makers (Honda, Susuki)
SAIC (Only one that started as Auto maker)
Seems it took 10-15 years from them starting cars to producing widely sold cars. Though, to be fair, none of those companies had Apple's world wide brand recognition or financial clout (Except maybe Huyndai, Toyota), which all were very large and well known in their home countries at least).
How is 14% a high margin? And don't give me BS THAT 28% of a $200 iPod is less than 14% of a $50k car. Dollars to donuts. 28% of $50k worth of iPods is still more than 14% of $50k worth of 1 car.
Those are net margins, their high end car makers gross margins are about 25-30%.
If Apple sells 1M (not a huge number, that's number #18 in car makers) cars at 60K cars with 30% gross margins 18K per car (70 times the gross margin of a Iphone with an ASP of $650).
That's 18B in gross profits. Not shabby at all, even by Apple's.
As for the rest of the rant, go and look at the net profit in every industry and you'll see why investing in high end car makers is not such a bad place to be, compared to other industries (except those like Banking and oil, were they seemingly just print money).
Samsung SM5 or SM7, it even cooperates with Renault - Renault Lattitude and Koleos are more Korean than French
Since Apple usually do things a little bit differently, it's quite fun to speculate what they might be up to. Maybe this isn't for a product you can actually buy. Maybe this is sort of an Uber/Taxi/car-pool replacement, only with automated electric vehicles owned and operated by Apple. In Europe, it could use Bus/taxi lanes and would operate on a sort of car-pooling basis in that multiple passengers could be accommodated per trip. All summoned, booked and paid for via your iPhone of course. That's why it's a mini-van. It could also replace those communal city bike schemes.
Another model would be for quiet after-hours automated goods delivery to businesses. The deliveries would be robotically offloaded into purpose built secure storage modules, perhaps something like a sophisticated Parcel Motel in built up areas. A lot of city traffic congestion is caused by white vans.
Apple would of course own and operate the solar farms that recharge their little fleet. The profit margin is in the service and in the elimination of human labour.
Absolutely. I'm not very familiar with the landscape in Monterey. Maybe it's a great location. Although there are forests in Monterey (including Los Padres and of course Monterey National Forest) I was mostly thinking of NC. The east coast is dense with trees. Living here I forget what California calls a forest. Maybe it is just scrubland. I've been looking for survey maps. If I find anything I'll be sure to post.
Agreed.
From what I've read, they were burning all the wood for 170 acres of forest. The residents complained about the 24/7 smoke that was wafting into their yard and Apple changed gears and decided to mulch everything instead when it got reported on the news. It really is a tough call. Sure, the process of making parts of solar panels creates a byproduct called "silicon tetrachloride" that is toxic but do the means justify the end? Tough call. If they used electricity produced by coal power, they get lambasted for supporting dirty energy but by using solar panels, they kind of balance out (or come out favorably to the maintstream population who don't realize the production chain costs).
I think Apple has the right idea but I'm with you Spliff, I would like to see Apple go into an area where none of the other tech companies are right now. Nuclear energy. I'm also a big supporter of it because getting people to "use less" is not something that is in North American culture. We always want more and are not willing to sacrifice anything of benefit to get it. I'm guilty of it myself. Getting a company like Apple behind nuclear technology would be a huge win because they could leverage their reputation to get it accepted by the general population.
On topic (FWIW), Apple getting into this area is a good thing. Google and Tesla have been good for the industry and have laid a lot of groundwork but Apple will learn from what they did and improve on it. Competition is good and Apple likes to compete so you know the other companies (especially the old school car companies) are going to have to step their game up. It also might just be the design to have a Google like mapping vehicle for them to improve their map app.
http://www.autoblog.com/2010/07/27/why-does-it-cost-so-much-for-automakers-to-develop-new-models/
I'd be surprised if Apple designed the car itself. That sort of work can be more economically farmed out to Italian design houses. Lots of automakers even, do this. They must imagine they have some talents that can be of use making the car self-driving.
http://www.thetruthaboutcars.com/2012/06/samsung-wants-its-name-off-samsung-cars/
"Korea’s Samsung, better known for flat panel TVs, Galaxy smart phones and other gadgetry, wants its name removed from cars produced by Renault in Korea. “We want to take our brand ‘Samsung’ out of Renault Samsung since we don’t have anything to do with the car sales,” a Samsung executive told The Korea Herald.
Samsung Motors was established in 1994 when Samsung Chairman Kun Hee Lee wanted to branch out into carmaking. Lee soon learned an expensive lesson.
When first cars rolled off the line in 1998, Korea was hit by the Asian financial crisis. Samsung Motors was put up for sale and Renault bought a 70 percent stake for $560 million in September 2000. It was decided to keep the Samsung brand, which had more standing in the Korean market than Renault. There is a license agreement that allows the carmaker to use the Samsung brand through 2020.
Renault Samsung is not doing so well. Last year, its sales dropped 9 percent. In the first quarter of this year, Renault Samsung was the worst performer among the Korean carmakers."
A large part of the cost in building cars comes from the headcount. Tesla employs about 10,000 people and they have to work a lot of overtime:
http://www.autoblog.com/2013/02/23/teslsa-ceo-elon-musk-on-high-cost-of-building-model-s-i-wanted/
"In December, at the height of its efforts to achieve a 20,000-vehicle annualized production rate, workers were averaging something like 68 hours a week, Musk said (and also participated in). Obviously, that's expensive in terms of paying additional overtime wages, and can lead to employee burn out if sustained. "The amount of overtime required to achieve 400 cars per week was pretty extreme. That has improved pretty dramatically," Musk said. That number is now down to about 50 hours a week and should drop to the mid-40's sometime next month, Musk said."
The component cost is another area:
"Another area where Tesla is achieving large cost savings is in its supply chain. As a startup, suppliers didn't offer Tesla the same sort of deals they might to an established OEM. They used industry estimates of 1,500 units per year – rather than Tesla's figure of 20,000 – to set pricing. That's now changing and, as the company meets certain volume targets, the prices (particularly for the all-important battery cells it's sourcing from Panasonic) are falling to more reasonable levels."
Here it says the batteries cost under 1/4 of the car price:
http://insideevs.com/tesla-battery-in-the-model-s-costs-less-than-a-quarter-of-the-car-in-most-cases/
http://en.wikipedia.org/wiki/Tesla_Model_S#Battery_swapping
The replacement costs are $10k for the 60kWh and $12k for the 85kWh. The following article goes into some details about Tesla:
http://www.businessinsider.com/tesla-the-origin-story-2014-10
It mentions that batteries double in capacity roughly every 10 years. They can take quite large leaps when new processes come along:
http://www.extremetech.com/computing/185999-us-department-of-energy-doubles-lithium-ion-battery-capacity-with-spongy-silicon
If battery capacity shoots up to double, they can cut the weight, the price, possibly charging time. Musk said in the above link they're aiming for 25% gross margins. Improving margins shouldn't be too hard if the product is good enough.
$40k car with 5% gross margins = $38k cost. Same car with 30% gross margins (Mac margins) would be $54k.
If they made the production line efficient and cut the cost of batteries in half, that would bring the retail price down to maybe $45k. You'd easily pay 20% more for an Apple car.
GM manages over 9m units per year, Tesla is aiming for 55k this year:
http://www.wsj.com/articles/teslas-loss-widens-as-spending-increases-1423695065
Apple has the cashflow to pull off making a car with volumes between Tesla and GM. The other aspect of batteries is home power. A set of batteries in the home plus solar panels on the roof can power a home permanently without the grid or gas and possibly free vehicle fuel.
A home would use about 10kWH per day, an electric car would use about the same. Solar can provide about 5kWh per day depending on the size and efficiency of the panels but efficiency improvements in each area could get pretty close to completely clean energy.
The driverless part seems like an unnecessary distraction that could be added in later on. Investing in electric cars would be great. I can see why they wouldn't partner with Tesla because who gets the profit? They'd effectively have to buy Tesla out for ~$30b but they are profitable so don't need to be bought out. I'd rather they worked together but business doesn't always allow this to happen.
I thought I read Cook approved 1000 employees for this project. That's far more than a few hundred.
Even thought it's a new industry for Apple, I would bet Apple could get deals on pricing without having to prove themselves as a car maker.
R&D is not the same as vehicle design, manufacturing or engineering. In this case, the executive hired is very young.
The full codename is "Titan Uranus". A nice little dig at what Tesla will be feeling if Apple do release a car.
I'd be first in line if I could buy both an Apple Car and an Apple Home.
The contract company mentioned in the WSJ story is fascinating: http://www.magnasteyr.com/capabilities/vehicle-engineering-contract-manufacturing/customers