Apple could be Tesla's biggest threat, analyst says

AppleInsider · February 10, 2021 10:57PM

Apple could be the biggest competitive risk that Tesla could face in the near term, Loup Ventures' Gene Munster said in a recent interview about "Apple Car" rumors.

Credit: AppleInsider

In a conversation with CNET's Brian Cooley, Munster said that "it's very clear Apple has ambitions to build a car." Munster, a co-founder and partner at Loup Ventures, said that this intention wasn't clear six months ago.

Now, however, Munster says he is surprised that Tesla shares haven't been more negatively impacted by rumors of "Apple Car" development ramping up. He's also surprised that Apple shares haven't surged because of it. "I think Apple is Tesla's biggest competitor," Munster said.

Despite that, Munster said, he believes that both companies can coexist in a future auto market. Both Apple and Tesla have the potential to seriously hurt existing automakers, and Munster thinks the "next wave" of transportation will come from the technology industry. "That means Apple is going to be a competitor to Tesla, that means Tesla needs to figure this out," Munster said.

The Loup Ventures partner predicts that, a decade from now, Tesla could have 25% of the global electric vehicle market share. Apple, he adds, could have 5%, 10%, or 15% of the market.

Munster also played down speculation that Tesla and Apple could ever merge, claiming that both companies are too unrelenting when it comes to control of their own products.

As far as why Apple would want to enter the vehicle industry, the analyst says that it's the addressable market. "It's orders of magnitude larger than anything Apple's gone after before. What keeps tech companies awake at night is growth," he said.

And despite the fact that previous talks between Apple and automaker partners have reportedly fizzled out, Munster believes that isn't going to change the Cupertino tech giant's mind on the matter.

"We don't have a signed deal with any automaker, but that does not change this direction that Apple is going," Munster said.

emcnair · February 10, 2021 11:22PM

I was just looking at the market cap of Mazda Motors, which is 3.6 billion. Apple has the capital to just buy an automotive company.

jumpingcoco · February 11, 2021 12:31AM

Apple is gonna upend the auto industry. There will be a few major battery and electric motors suppliers, there will be electronics parts suppliers, there will be a few assembly lines, and manufacturers. GM and Ford will be the Sony Walkman in the music industry or Nokia N72 in the cellphone industry, they'll still be around and be relevant for a while, but will have a hard time hanging on. Cars with combustion engines and gears removed will be heavily weighed on mobile experience, this could be interesting

jwsc · February 11, 2021 12:36AM

So, here we are almost 7 years since the original project Titan was first mentioned. Since that time Tesla’s technology has advanced considerably. Other EV auto makers have entered the field. And the traditional auto industry has made significant moves into the EV market.

I must ask, what gap in the market can Apple fill with their own potential offerings? What is every other potential competitor missing? Admittedly, this could be due to a lack of imagination on my part, even though I have given this considerable thought.

It’s possible that Apple could pull an “iPhone” and announce an automobile that is well beyond the imagination of the enthusiasts on this forum and EV enthusiasts in general. But with Tesla so far ahead of everyone else in motor, battery, and autonomous technology, that’s going to be a tall order for Apple. Tesla likely has hundreds of millions of actual road miles to feed into their AI learning algorithms. Apple’s road miles wouldn’t even occupy one pixel on a chart if you put them side-by-side to scale.

Look at SpaceX - reusable rockets as standard operating procedure. A few small start-ups dipping their toes in reusability. And the rest of the big players got nothin’.

So I am asking, what can, what must, Apple do to differentiate their automotive offerings from everyone else’s? Because if Apple can’t do that they will get creamed.

tmay · February 11, 2021 12:44AM

Tesla has something on the order of 20% of the BEV market, right at 500,000 units sold for 2020, and as the number of BEV models increases in the market, Tesla will see its unit marketshare shrink, and that's going to be readily apparent in 2021.

Worse for Tesla, Model S and Model X sales are being cannibalized by Model 3 and Model Y sales, which is driving down the ASP of Tesla vehicles.

Numbers for 2020,

345,000 Model 3
80,000 Model Y
55,000 combined Model S and Model X

Apple won'f have any impact on Tesla sales for another 4 or 5 years, so all of that competition is coming from the "dinosaurs" like VW, Chinese EV companies, and a few new entrants which may or may not survive.

Tesla's biggest fuckup, is not having an EV pickup until, at best, late next year, when Ford will be delivering an F-150 EV in volume production, not to mention GM with a Hummer model.

tzeshan · February 11, 2021 12:58AM

The electric car does not work well in cold weather. It does not have sufficient hearing system like the gasoline car.

m68000 · February 11, 2021 1:00AM

jumpingcoco said:

Apple is gonna upend the auto industry. There will be a few major battery and electric motors suppliers, there will be electronics parts suppliers, there will be a few assembly lines, and manufacturers. GM and Ford will be the Sony Walkman in the music industry or Nokia N72 in the cellphone industry, they'll still be around and be relevant for a while, but will have a hard time hanging on. Cars with combustion engines and gears removed will be heavily weighed on mobile experience, this could be interesting

Really? With what? Last time I checked, both GM and Ford have production vehicles and Apple does not. As far as I know, Apple has not publicly stated they want to build a vehicle? It’s all rumor and hearsay. Why doesn’t Tim Cook open his mouth about it IF they really want to try it? So, if Apple does end up doing something, does that mean that Microsoft and Samsung will come out of the woodwork and try to do something too? LOL, computer and electronics companies making vehicles...

adrian727 · February 11, 2021 1:02AM

emcnair said:

I was just looking at the market cap of Mazda Motors, which is 3.6 billion. Apple has the capital to just buy an automotive company.

Toyota has already acquired a controlling stake of Mazda, better buy Jaguar Land Rover for its lack of allies and existing i-pace electric platform.

crowley · February 11, 2021 1:50AM

Company without a known product will be the biggest competitor to a company that is not dominant and already has plenty of capable competitors. When was the last time Munster said anything that even reflected recognisable reality, let alone be right?

kuyangkoh · February 11, 2021 2:55AM

tmay said:

Tesla has something on the order of 20% of the BEV market, right at 500,000 units sold for 2020, and as the number of BEV models increases in the market, Tesla will see its unit marketshare shrink, and that's going to be readily apparent in 2021.

Worse for Tesla, Model S and Model X sales are being cannibalized by Model 3 and Model Y sales, which is driving down the ASP of Tesla vehicles.

Numbers for 2020,

345,000 Model 3
80,000 Model Y
55,000 combined Model S and Model X

Apple won'f have any impact on Tesla sales for another 4 or 5 years, so all of that competition is coming from the "dinosaurs" like VW, Chinese EV companies, and a few new entrants which may or may not survive.

Tesla's biggest fuckup, is not having an EV pickup until, at best, late next year, when Ford will be delivering an F-150 EV in volume production, not to mention GM with a Hummer model.

WoW, lots of great analysis....yeah Hummer and F-150EV are coming. Whats the use if you dont have available high charging stations for hundreds of EVs that are coming? Oh wait maybe carry a charging generator, just saying.

sagan_student · February 11, 2021 3:46AM

JWSC said:

So, here we are almost 7 years since the original project Titan was first mentioned. Since that time Tesla’s technology has advanced considerably.  Other EV auto makers have entered the field.  And the traditional auto industry has made significant moves into the EV market.
I must ask, what gap in the market can Apple fill with their own potential offerings?  What is every other potential competitor missing?  Admittedly, this could be due to a lack of imagination on my part, even though I have given this considerable thought.
It’s possible that Apple could pull an “iPhone” and announce an automobile that is well beyond the imagination of the enthusiasts on this forum and EV enthusiasts in general.  But with Tesla so far ahead of everyone else in motor, battery, and autonomous technology, that’s going to be a tall order for Apple.  Tesla likely has hundreds of millions of actual road miles to feed into their AI learning algorithms.  Apple’s road miles wouldn’t even occupy one pixel on a chart if you put them side-by-side to scale.
Look at SpaceX - reusable rockets as standard operating procedure.  A few small start-ups dipping their toes in reusability.  And the rest of the big players got nothin’.
So I am asking, what can, what must, Apple do to differentiate their automotive offerings from everyone else’s?  Because if Apple can’t do that they will get creamed.

My best guess for how Apple is going to blow up the market and offer something that differentiates it from other car companies is to approach it to through services. Apple would supply a car service like no other. And with the integration with iOS, the ease and personalization you would experience upon entering the service would far exceed what any other service could offer.

Then you consider some of Apple’s possible costs... the maintenance on electric vehicles versus combustion vehicles, electric wins hands down. For the replacement parts (tires/brakes), these can be easily monitored and replaced on a schedule (something that Apple is exceptionally good at). The avoidance of having to build dealerships (as you are not selling cars).

When I ask the question how much mark up can one make on the sale of a car? My guess is on the low side of things. I don’t see how Apple makes its usual percentage on selling vehicles. But if they create fleets of vehicles and slowly dispatch them in major cities they are not competing with vehicle makers directly; rather, they are coming at them from a position that fits Apple’s playbook and next thing you know the game has changed and Apple is in a dominant position in very quick fashion... say 10 years??

dk49 · February 11, 2021 6:25AM

JWSC said:

So, here we are almost 7 years since the original project Titan was first mentioned. Since that time Tesla’s technology has advanced considerably.  Other EV auto makers have entered the field.  And the traditional auto industry has made significant moves into the EV market.
I must ask, what gap in the market can Apple fill with their own potential offerings?  What is every other potential competitor missing?  Admittedly, this could be due to a lack of imagination on my part, even though I have given this considerable thought.
It’s possible that Apple could pull an “iPhone” and announce an automobile that is well beyond the imagination of the enthusiasts on this forum and EV enthusiasts in general.  But with Tesla so far ahead of everyone else in motor, battery, and autonomous technology, that’s going to be a tall order for Apple.  Tesla likely has hundreds of millions of actual road miles to feed into their AI learning algorithms.  Apple’s road miles wouldn’t even occupy one pixel on a chart if you put them side-by-side to scale.
Look at SpaceX - reusable rockets as standard operating procedure.  A few small start-ups dipping their toes in reusability.  And the rest of the big players got nothin’.
So I am asking, what can, what must, Apple do to differentiate their automotive offerings from everyone else’s?  Because if Apple can’t do that they will get creamed.

I think Apple will focus heavily on the user experience inside the vehicle. Apple is aiming for a driverless car, and technical feasibility of that aside, Apple would want the rider to almost completely focus on work and entertainment. Heavy integration with Apple's devices and services should be expected. They are also working on projecting images on car windows, with added AR. The user experience will be very different than what anyone offers now, including Tesla. Having the fastest acceleration or the highest battery Miles won't be it's USP, rather it will be the user experience - just like the original iPhone and basically all other Apple devices.

Also, saying that "I don't see what gaps they will fill" is a typical response to rumored Apple products. Blackberry and Nokia executives felt the same when the iPhone was rumoured.

fotoformat · February 11, 2021 8:06AM

crowley said:

Company without a known product will be the biggest competitor to a company that is not dominant and already has plenty of capable competitors. When was the last time Munster said anything that even reflected recognisable reality, let alone be right?

Agree... when Munster and the like start with a "could", as in Apple could be the... I start to lose interest in their proffering. When pundits say "can" and "will" rather than "could" or "would" my attention span perks up for the information they may have to offer.

avon b7 · February 11, 2021 9:12AM

I like the guy because he's always been the likeable crackpot in the Apple analyst world but he does speak a pure kind of nonsense from time to time.

Tesla's biggest competitor? How can any sane person reach that conclusion when Apple doesn't have a product on the market? Is he thinking fully autonomous driving or regular EVs as they are now?

There are plenty of technology competitors out there too. Some of those will sell cars and others will sell platforms. And when you have certification you're good to go. From there on it's a question of classic competition.

As things stand right now, the logical stance would be to simply wait for an Apple car to arrive and then look at the bigger picture.

One thing is certain. No one in the car world will be able to differentiate from competitors in any meaningful way with regards to core hardware or technology. Cars aren't going to change that much in those areas. How will you differentiate one fully autonomous EV from another if both have the required certification? It will be like today. Price, reputation, needs, status,...

And Apple isn't likely to come out with six or seven models at launch either.

Everybody will be everybody else's biggest competitor but just like today the pie will be divided up into niche segments.

longpath · February 11, 2021 11:45AM

My running hypothesis is that Apple’s vehicle needs a mature version of the AR and VR work they’ve been working on and driverless functions needs to be operationally optional, not mandatory, as present rumors suggest. Anything less than that and all the high end chassis work being done by ex-Porsche people makes no sense. Why go to the trouble of designing a driver’s chassis if there’s no human driver to enjoy it? If the first generation being fully driverless is true, and not intentional misdirection, then it’s still a glorified robotaxi, and zero threat to the majority of BEV players in the market, especially Tesla, whose battery and motor tech is a solid 5 years ahead of their competitors. Conversely, those competitors are decades ahead of Tesla in figuring out how to mass produce their designs. Every design that Tesla has come out with has been a struggle to ramp up production, and as a recent conversation between Elon Musk and Sandy Munro confirmed, quality has suffered during each of those volume ramp ups.

tmay · February 11, 2021 12:23PM

longpath said:

My running hypothesis is that Apple’s vehicle needs a mature version of the AR and VR work they’ve been working on and driverless functions needs to be operationally optional, not mandatory, as present rumors suggest. Anything less than that and all the high end chassis work being done by ex-Porsche people makes no sense. Why go to the trouble of designing a driver’s chassis if there’s no human driver to enjoy it? If the first generation being fully driverless is true, and not intentional misdirection, then it’s still a glorified robotaxi, and zero threat to the majority of BEV players in the market, especially Tesla, whose battery and motor tech is a solid 5 years ahead of their competitors. Conversely, those competitors are decades ahead of Tesla in figuring out how to mass produce their designs. Every design that Tesla has come out with has been a struggle to ramp up production, and as a recent conversation between Elon Musk and Sandy Munro confirmed, quality has suffered during each of those volume ramp ups.

I have to laugh at your statement about Tesla "whose battery and motor tech is a solid 5 years ahead of their competition".

That's decidedly uninformed bullshit. If anything, those auto manufacturers that have waited to enter the market, such as Toyota, will have better motor tech and Solid State Batteries in volume production before Tesla does, and if you actually think about it, Tesla is now hobbled with older designs, and those only in a few niches, and worse, still hasn't been able to generate a profit on vehicle sales.

Toyota's profit for 2020; over $18 B, and close to 10 million vehicle sales, while Tesla struggles to 500K, and given that Toyota has shipped over 15 million HEV's since the first Prius, I'm guessing that they aren't really behind on motor technology, but have waited to enter the BEV market when they believe that they can generate a profit. Toyota is also a leader in hydrogen vehicles, which will see growth especially in long haul trucking.

Elon Musk's statement on hydrogen vehicles;

https://www.cnbc.com/2019/02/21/musk-calls-hydrogen-fuel-cells-stupid-but-tech-may-threaten-tesla.html

edited February 2021

tmay · February 11, 2021 12:32PM

Kuyangkoh said:

tmay said:

Tesla has something on the order of 20% of the BEV market, right at 500,000 units sold for 2020, and as the number of BEV models increases in the market, Tesla will see its unit marketshare shrink, and that's going to be readily apparent in 2021.

Worse for Tesla, Model S and Model X sales are being cannibalized by Model 3 and Model Y sales, which is driving down the ASP of Tesla vehicles.

Numbers for 2020,

345,000 Model 3
80,000 Model Y
55,000 combined Model S and Model X

Apple won'f have any impact on Tesla sales for another 4 or 5 years, so all of that competition is coming from the "dinosaurs" like VW, Chinese EV companies, and a few new entrants which may or may not survive.

Tesla's biggest fuckup, is not having an EV pickup until, at best, late next year, when Ford will be delivering an F-150 EV in volume production, not to mention GM with a Hummer model.

WoW, lots of great analysis....yeah Hummer and F-150EV are coming. Whats the use if you dont have available high charging stations for hundreds of EVs that are coming? Oh wait maybe carry a charging generator, just saying.

During the runup to the election, the Biden Administration proferred $5 B for some 500,000 new charge points, while adding many new stations. Whether that actually happens is a political issue, but it is also that case that adding solar and wind generation sources will continue to reduce the carbon footprint of all of the EV's.

https://www.axios.com/biden-electric-vehicles-infrastructure-924d4d85-280d-41ee-8449-fd62dd3ccecf.html

edited February 2021

massiveattack · February 11, 2021 1:18PM

jumpingcoco said:

Apple is gonna upend the auto industry. There will be a few major battery and electric motors suppliers, there will be electronics parts suppliers, there will be a few assembly lines, and manufacturers. GM and Ford will be the Sony Walkman in the music industry or Nokia N72 in the cellphone industry, they'll still be around and be relevant for a while, but will have a hard time hanging on. Cars with combustion engines and gears removed will be heavily weighed on mobile experience, this could be interesting

No at this moment.

Making an electric car is easier than traditional cars, but harder than most of IT guys think.
Apple is aware of this and has hired a lot of car guys.

But Apple needs to find a car company, which is willing to make cars for Apple, but it will not be easy.
All of car companies already know that they have the risk to be the next Foxconn.

Apple has succeeded to control all supply-chain processes and quality management at Foxconn. Apple wants to control everything over a car company, but Apple will have to find a compromise with a car company if Apple is really willing to make cars.

What is the compromise? Car companies want to get more from Apple´s software, but Apple does not want to share anything.

Time is running and time is against Apple.

jwsc · February 11, 2021 2:28PM

tmay said:

longpath said:

My running hypothesis is that Apple’s vehicle needs a mature version of the AR and VR work they’ve been working on and driverless functions needs to be operationally optional, not mandatory, as present rumors suggest. Anything less than that and all the high end chassis work being done by ex-Porsche people makes no sense. Why go to the trouble of designing a driver’s chassis if there’s no human driver to enjoy it? If the first generation being fully driverless is true, and not intentional misdirection, then it’s still a glorified robotaxi, and zero threat to the majority of BEV players in the market, especially Tesla, whose battery and motor tech is a solid 5 years ahead of their competitors. Conversely, those competitors are decades ahead of Tesla in figuring out how to mass produce their designs. Every design that Tesla has come out with has been a struggle to ramp up production, and as a recent conversation between Elon Musk and Sandy Munro confirmed, quality has suffered during each of those volume ramp ups.

I have to laugh at your statement about Tesla "whose battery and motor tech is a solid 5 years ahead of their competition".

That's decidedly uninformed bullshit. If anything, those auto manufacturers that have waited to enter the market, such as Toyota, will have better motor tech and Solid State Batteries in volume production before Tesla does, and if you actually think about it, Tesla is now hobbled with older designs, and those only in a few niches, and worse, still hasn't been able to generate a profit on vehicle sales.

Toyota's profit for 2020; over $18 B, and close to 10 million vehicle sales, while Tesla struggles to 500K, and given that Toyota has shipped over 15 million HEV's since the first Prius, I'm guessing that they aren't really behind on motor technology, but have waited to enter the BEV market when they believe that they can generate a profit. Toyota is also a leader in hydrogen vehicles, which will see growth especially in long haul trucking.

Elon Musk's statement on hydrogen vehicles;

https://www.cnbc.com/2019/02/21/musk-calls-hydrogen-fuel-cells-stupid-but-tech-may-threaten-tesla.html

I’m not sure where you’re getting your information from but it appears to be dated, at best.

Tesla’s dual motor design for front and rear axles eschews a transmission altogether, eliminating mechanical powertrain loss. The car computer controls the torque for each motor and the AI learns to improve distribution of power over time between front and rear axles improving performance and traction. No competitor that we know of has pursued this system design. It is the primary reason that Tesla autos surpass their competitors in range and will likely do so for the foreseeable future.

And in case you haven’t heard, Tesla has made a profit for five consecutive quarters in a row.

ninjaman · February 11, 2021 2:31PM

I would think for Apple to be a threat their first release would have to be just as good, if not better, than any Tesla model available at that time. Apple does have one advantage and that is that they shouldn't make as many mistakes since they have more data available to them now than Tesla did then they launched...Apple will do what Apple does best, take something that someone else has done, study and learn from their mistakes and release a first gen that is far better than anyone else's first gen... no other company innovates off of the work of other people like Apple does...

tmay · February 11, 2021 4:00PM

JWSC said:

tmay said:

longpath said:

My running hypothesis is that Apple’s vehicle needs a mature version of the AR and VR work they’ve been working on and driverless functions needs to be operationally optional, not mandatory, as present rumors suggest. Anything less than that and all the high end chassis work being done by ex-Porsche people makes no sense. Why go to the trouble of designing a driver’s chassis if there’s no human driver to enjoy it? If the first generation being fully driverless is true, and not intentional misdirection, then it’s still a glorified robotaxi, and zero threat to the majority of BEV players in the market, especially Tesla, whose battery and motor tech is a solid 5 years ahead of their competitors. Conversely, those competitors are decades ahead of Tesla in figuring out how to mass produce their designs. Every design that Tesla has come out with has been a struggle to ramp up production, and as a recent conversation between Elon Musk and Sandy Munro confirmed, quality has suffered during each of those volume ramp ups.

I have to laugh at your statement about Tesla "whose battery and motor tech is a solid 5 years ahead of their competition".

That's decidedly uninformed bullshit. If anything, those auto manufacturers that have waited to enter the market, such as Toyota, will have better motor tech and Solid State Batteries in volume production before Tesla does, and if you actually think about it, Tesla is now hobbled with older designs, and those only in a few niches, and worse, still hasn't been able to generate a profit on vehicle sales.

Toyota's profit for 2020; over $18 B, and close to 10 million vehicle sales, while Tesla struggles to 500K, and given that Toyota has shipped over 15 million HEV's since the first Prius, I'm guessing that they aren't really behind on motor technology, but have waited to enter the BEV market when they believe that they can generate a profit. Toyota is also a leader in hydrogen vehicles, which will see growth especially in long haul trucking.

Elon Musk's statement on hydrogen vehicles;

https://www.cnbc.com/2019/02/21/musk-calls-hydrogen-fuel-cells-stupid-but-tech-may-threaten-tesla.html

I’m not sure where you’re getting your information from but it appears to be dated, at best.
Tesla’s dual motor design for front and rear axles eschews a transmission altogether, eliminating mechanical powertrain loss. The car computer controls the torque for each motor and the AI learns to improve distribution of power over time between front and rear axles improving performance and traction. No competitor that we know of has pursued this system design. It is the primary reason that Tesla autos surpass their competitors in range and will likely do so for the foreseeable future.
And in case you haven’t heard, Tesla has made a profit for five consecutive quarters in a row.

Made a profit selling carbon credits, but not much else. BFD. Not much of a market left given the competitors have added more BEV models in the EU

As for range, Tesla has never achieved its stated EPA range estimates in any reviews, and sure given a big, fucking, battery capacity, Tesla scores for range.

https://www.zerohedge.com/markets/edmunds-every-single-tesla-weve-tested-has-failed-hit-its-epa-range-estimate

...but look how great the Tacan comes out.

You mean multi motor design like this....

https://www.youtube.com/watch?v=yzwM8KE2L3I&feature=emb_logo

edited February 2021

Apple could be Tesla's biggest threat, analyst says

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