Former GM exec pans rumored 'Apple Car' sight unseen, calls it 'a gigantic money pit'

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  • Reply 101 of 156
    Bob Putz!
  • Reply 102 of 156
    Quote:
    Originally Posted by sagan_student View Post

     

    An incredibly good (and long) read on Energy, Cars, and Tesla.

     

    http://waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html

     

    It's worth anyone's time.




    Very interesting read. The author glossed over the environmental impact of making an EV, which mstone mentions earlier. Those high-power magnets in the electric motor take rare-earth materials to make. A lot of those materials come from China.

     

    My long view is that EVs are the future. A well-designed electric motor can last many decades, so that offsets the environmental cost. Lithium can be recycled,  I believe, so that lessens their impact. The electric motor controllers continue to get better and better (being more than 90% efficient). The article's "long tail pipe" issue is real, at least in the US, but this can change (via government regulations). I'd like to see more use of nuclear power to replace oil and coal for electrical generation. And solar/photovoltaic panels continue their (slow) pace of improvement.

  • Reply 103 of 156
    Quote:

    Originally Posted by adhir View Post



    I don't know that I'd drive an %uF8FFCar. Just sayin'.



    Exactly what are you saying ...

  • Reply 104 of 156
    Quote:

    Originally Posted by TomMikele View Post



    Earlier in his career, he was a very astute and accomplished [auto] exec who spearheaded many extremely successful and innovative projects. More recently, he has made himself the object of ridicule and jokes by saying a lot a very uniformed things reflecting his expertise is long gone. He's a great foible for the press. He is very opinionated and easily provoked. He makes a lot of demonstrative and specific statements, very few of which are proven out by the facts or events that follow. He does deserve respect, but he makes it hard when he keeps making a fool of himself and keeps allowing the press to use him like they do. It's as if an editor says call [Lutz]. He'll give us something colorful and somewhat ridiculous that will generate a lot of response and pump up the comments and page views. Most of the more astute [auto] tech sites regard him with raised eyebrows as if to say, "Oy vey, what is [Lutz] going to say now."

     

     

    take out the words "auto" where bracketed above and replace the name Lutz... you could be talking about Woz!

  • Reply 105 of 156



    I'd have expected option-shift-K to appear properly on an Apple forum. Guess not.. :)

     

    (That was an Apple Symbol when I submitted the post).

     

    Sorry..

  • Reply 106 of 156
    portcity wrote: »
    This guy has a point. Yes, technology plays a part in automobiles but not as big a part as the other mechanics. In fact, the best cars in the world (Ferrari, Rolls Royce, Bentley, Bugatti, MB, BMW. etc) focus on advancements in mechanical technology. Apple would be smart to partner with an automobile company and supply the technology and leave the other stuff to the experts.

    why would that be smart? especially if theyre not building a combustion engine?

    becoming beholden to others for their products isnt how apple does business.
  • Reply 107 of 156
    nolamacguy wrote: »
    portcity wrote: »
    This guy has a point. Yes, technology plays a part in automobiles but not as big a part as the other mechanics. In fact, the best cars in the world (Ferrari, Rolls Royce, Bentley, Bugatti, MB, BMW. etc) focus on advancements in mechanical technology. Apple would be smart to partner with an automobile company and supply the technology and leave the other stuff to the experts.

    why would that be smart? especially if theyre not building a combustion engine?

    becoming beholden to others for their products isnt how apple does business.

    Yet that's exactly how they build their products.
  • Reply 108 of 156

    Lots of ignorant commenting on this particular article, but I'm not surprised given the quoted remarks and that this is an Apple forum.

     

    For the record: I'm an Apple fan, and a car guy.

     

    First, Lutz did not spend his whole career at GM, not even close; he's been around the block in the automotive industry.  So before commenting on Lutz's performance at GM over the last 4 decades, which doesn't exist, go to Wikipedia and read his resume.

     

    Second, many here, and numerous articles elsewhere, keep citing Apple's prior decisions to enter the smartphone and tablet market, and the now famous quotes from various tech bosses that proved wrong over time.  The problem I see with this is that those were tech bosses commenting on another tech company's decisions on a tech product.  While their predictions proved wrong, at least Gates and the like are tech guys.  Lutz is a car guy, and he's expressing his opinion of a tech company trying to enter an entirely different market (which happens to be his own).  He knows the automotive business far better than anyone at Apple does, and he's commenting on a computer company that's trying to build a product way outside of its own wheelhouse.  He's not just commenting on Apple's ability to produce a better battery (arguable the Achilles heal of current electric cars), but the car as a whole (hence the suggestion to partner with an existing auto OEM).  Building cars at volume is way harder than building iPhones at volume, and his warning is that Apple is going to have to spend an awful amount of money to get good at it.  That may not be the wisest use of their (Apple's) money.

     

    Third, to put Apple's challenge into some perspective, read up on the new Elio Motors.  It's a very promising endeavor, but also points out the difficulties in bringing a car and a car company to life.  Granted, the key difference here is money (Apple has tons of it), but just having a pile of it does not produce a great car.  The regulatory burden alone is enormous.

     

    On Tesla profits, read this:

    http://www.bloomberg.com/news/articles/2015-03-04/as-tesla-gears-up-for-suv-investors-ask-where-the-profits-are

     

    Finally, as a personal opinion, I do wonder where Apple will place this car in the market, if indeed they are really planning to build and sell it.  There are already several model options on the lower end, and a couple on the high end.   And there are more on the way throughout the range.  So where does Apple think they gain an advantage?  What's their strategy here?  There's no way they're going to make the 25 or 30 percent profit margins on a car like they do on their computer gear.

  • Reply 109 of 156
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by NolaMacGuy View Post



    becoming beholden to others for their products isnt how apple does business.

    You mean except for Google (previously for search and maps), Intel, Samsung, TomTom, Broadcom, Qualcomm, Foxconn, Sony, Micron, Panasonic, Pegatron, Seagate, TSMC, Texas Instruments, Nvidia and a few hundred others.

     

    https://www.apple.com/supplier-responsibility/pdf/Apple_Supplier_List_2015.pdf

  • Reply 110 of 156
    Quote:

    Originally Posted by NolaMacGuy View Post





    why would that be smart? especially if theyre not building a combustion engine?



    becoming beholden to others for their products isnt how apple does business.

     

    There's far more to designing the mechanicals of a car than the engine.

  • Reply 111 of 156
    MarvinMarvin Posts: 15,273moderator
    gqb wrote: »
    This would mean being able to build a car for no more than $25k...
    $25k is the low price end of the spectrum, or at least bottom third.
    What in Apple's history of top tier pricing makes you think that this is a price arena they'd be at all find interest in?

    If they hit too high a price point, they wouldn't hit a high volume. $25k I mentioned was the build cost not the retail price. The BMW 3-series and Mercedes C-Class are in this price range:

    http://www.caranddriver.com/bmw/3-series
    http://www.mbusa.com/mercedes/vehicles/class/class-C/bodystyle-SDN

    I don't expect them to make one model for everyone either, this price range is just an average. I think they'd be best hitting 4 classes:

    small city car ~$20k, family car ~$30k, MPV ~$40k, luxury car ~$60-80k

    The top price point isn't going to sell many units. Porsche has models in that price range and only sells 190k cars total worldwide.

    Say they manage 500k units at $20k, 300k at $30k, 150k at $40k and 50k at $70k for 1 million units, that's $28.5b per year revenue. Aim for 15% net margin to get $4.3b net, maybe gross margin of 25% so $25k cost means ~$33k retail.

    This is less than 10% profit growth for Apple but still a lot of income and every piece of every new industry they tackle helps diversify their income stream.

    They don't set out to be the biggest company by volume so the high volume manufacturers like GM, Toyota, VW are safe in that regard, Apple wouldn't even be top 10 with 1 million units. There's loads of room for another player to build high quality affordable vehicles.
  • Reply 112 of 156

    "The Money Pit"... now that was a funny movie.

     

  • Reply 113 of 156
    Quote:
    Originally Posted by ascii View Post

     

    Elon Musk has said that if all Telsa were doing was making Model S and selling it, they would be making a profit, it's only because they are investing so much in capacity expansion and R&D for the Model 3 that they are making a loss overall. So it is possible to make money selling electric cars.

     

    Maybe if GM aren't making any money, it's more to do with the particular models they have designed, rather than anything inherently unprofitable about electric cars.


     

    and nobody with right mind would buy Teslas without any tax breaks.  And that's what Apple is probably betting on -- even greater "green" tax incentive from the US gov't to finance consumer purchase. 

  • Reply 114 of 156
    wizard69wizard69 Posts: 13,377member
    pmz wrote: »
    Same was said about music players, cellphones, and tablets.
    In this context his comments are a bit funny.
    This guy doesn't know Apple very well.

    True but I don't expect an instant success when it comes to auto sales, it won't be like the instant success iPad was. The problem I see Apple running into and frankly it is the same problem Tesla has at the moment, is that one car isn't anywhere near suitable for everybody. For the first few year I'd expect Apple to have a surplus of customers simply due to the efforts required to get auto production lines up and running. After that they will need to work on expanded model lines. Frankly it is what Tesla is trying to do right now.

    In a nut shell I really believe Apple has potential here to be very successful. However success won't be measured instantaneously.
  • Reply 115 of 156
    Who the thinks apple is building a car from the ground up on their own???? Apples r and d expenses are as big as the entire NSF budget. Pretty pathetic for science in the USA I'd say, but I digress. Outside of the fringe,no one wants to waste their time driving anymore. They would rather be on their tech device while in transit. Apple (or some other tech company) will eventually partner or buy tesla or the next iteration of tesla and bury a lot of companies.....including GM.
  • Reply 116 of 156
    wizard69wizard69 Posts: 13,377member
    
    
    
    sandor wrote: »
    Bob Lutz looks like a gentleman that would say "can't be done".
    Knowing a few current and former GM employees the impression I get of management at GM isn't very good. The attitude seems to be to shift out junk as cheaply as possible. The more I hear about GM the more disappointed I am with the fact that the government bailed them out.
    Power density in storage is the biggest issue with electric cars - seems like it is also a huge issue in mobile devices...

    True but it just isn't power density stored in the car, there is a significant issue with actually generating and delivering the power over a grid never designed for such large loads. Especially in residential areas.

    Frankly I really think Apple needs to place investments in nuclear technologies. If we can get small fusion reactors online by the middle of the next decade it would do wonders for distribution of power to support electric cars. The so called Green approaches are environmentally disgusting and too temperamental to rely upon.
  • Reply 117 of 156
    wizard69wizard69 Posts: 13,377member
    flabber wrote: »
    I think these so called "PC guys" might be the ones who wíll figure it out. I think they tend to have a much better understanding of electronics than car manufacturers who tend to be better with machinery. They're two very different beasts.
    Honestly this is nonsense, the components to make electric cars have existed since the dawn of the automobile. The problem has always been power storage and Apple has yet to demonstrate an ability to deliver a unique power source that solves this problem.
     

    And also: he can easily dismiss Apple as a failure-to-be in the automotive industry, but he forgets to mention that Tesla is doing a remarkable job, éven if they don't make a good enough profit yet (which I think they do), they managed to make a better electric car than any of the established car manufacturers have been able to. 
    People need moderate expectations, Apple will need to evolve in the car market just as Tesla has. My biggest fear is early investor demands that Apple show an instant profit. That isn't going to happen no matter what.
    I don't think that Apple will work together with a Toyota, Mercedes, BMW or Ford. But I do believe that they'll figure it out ánd slap those usually pretty old fashioned car manufacturers silly with technological advancements…
    Actually everyone of those manufactures you mentioned has been pretty progressive in moving tech forward. None of them however has breach the power wall that would allow electrics to be more than commuter cars.
    just like Tesla is doing. As good as they are with mechanics, they're not really there yet with electronics. And in the end I see the Ford's, VW's and Toyota's as the Nokia's of the car industry. They just don't know that they're falling behind and that technology is catching up on them yet… untill it's too late and someone else snatches away their customers.

    The market is too broad for what you imagine to actually happen. Apple would literally need dozens of different vehicles to make every potential customer happy.
  • Reply 118 of 156
    wizard69wizard69 Posts: 13,377member
    larrya wrote: »
    Yeah, our favorite computer company has a strong track record building...computers (wrist-worn, desktops, mobile). Maybe they should go into nuclear power next. /s

    You do realize that fusion power has the possibility of transforming the next decade. There are so many approaches that show promise right now that it is highly unlikely that they will all fail. Fusion could very well be the tech that replaces semiconductors when it comes to sucking up skilled technologists.
  • Reply 119 of 156
    wizard69wizard69 Posts: 13,377member
    Avoid the shit holes and you avoid the traffic jams. I've worked nearly 30 years in a fairly large city (Rochester NY) and have never had the issues you describe with traffic. The worst that can happen is to get hung up in traffic due to a blizzard and frankly you want to be in a gasoline powered vehicle with a full tank of gas when that happens.

    ????????????????????????????????????
    redhanded wrote: »
    I appreciate that the US is one of the most car-dependent countries in the world, but certainly in European urban areas, car ownership and use is declining and the trend is to discourage car use through parking restrictions, re-allocation of road space to other modes of transport and congestion charges.

    I have to laugh at advertising for cars showing hip young things zipping through empty city streets in the latest model while the reality of city driving is being stuck in a traffic jam, overtaken by people on bikes.

    Europe went in for diesel in a much bigger way that the US so NOx pollution caused by lying manufacturers like VW can be off the scale in some places so electric cars are better as they shift the pollution to outside the city.  However an Apple car will be stuck in traffic just like any other car although I am sure it will have a much better entertainment system so the occupants can amuse themselves when they are crawling along at 12mph stuck behind a bus.
  • Reply 120 of 156
    docno42docno42 Posts: 3,755member
    "those computer guys will never survive making cell phones"

    lol - love it.
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