So much of the experience of traditional automakers isn't really relevant to BEV manufacturing, which is why Tesla was able to build up its own manufacturing capability.
We take it for granted, but an internal combustion engine, plus all of the cooling and exhaust systems surrounding it, is a crazy complex (and dangerous) beast. It's kind of wild that we all blissfully ride around in metal boxes with a contained gasoline explosion occurring nonstop just a few feet away from us.
With a BEV, most of the complexity is the battery, and that will be outsourced to experienced firms.
It's true that the rest of a car is still more complex than a phone, in terms of the number of parts and the process of assembling them. But still -- it's not rocket science.
I'm not convinced that Foxcon would be able to be a quality automotive partner. Vehicles and electronics are constructed very differently. Just looks what happens when an auto company designs their own head units for a car. Uggh.
Another option would be for Apple to use some of its $76 billion in cash and marketable securities to purchase a controlling interest in an existing automotive company. For instance, the market cap of GM is $81 billion.
Best Alternative To a Negotiated Agreement (BATNA).
It's okay for Apple and these other manufacturers to walk away from negotiations. That's their best alternative -- at this point.
What has been reported is that Apple has been negotiating with companies who manufacture in the US. At this point, it looks like Apple Car jobs will not be coming to the US. One may bitch and moan about China, et al, taking American jobs, but the truth might be more like Americans, at the least their employers, don't see an upside to more American jobs.
Apple has succeeded partnering with companies who were hungry and succeeding against companies that too satiated to try something different.
Is Foxconn hungry? It does seem so.
Yeah, none of this is true. As I have stated several times, Apple wants to impose the same terms on the automobile industry that they are used to getting from the electronics industry. They refuse to acknowledge that the two spaces are entirely different. With the electronics industry you can survive on very low margins because the volume is huge. TSMC - for example - can get by on maybe $1-$5 per CPU that they make (just throwing it out there) because their chips are in like 2 billion smartphones, tablets, PCs etc. that are sold each year and the same facilities/equipment can be used for multiple clients (Apple, Qualcomm, AMD, MediaTek, Nvidia etc.) In automobiles the volume is much lower and the facilities and equipment can't be reused. While a parts facility can make parts for multiple manufacturers, a factory to assemble cars from those parts will usually only make cars for one company, and often even a single line of cars for one company (diesel pickups, gas SUVs and electric compacts aren't made at the same factory).
Another thing: these companies aren't going to line up to help Apple make cars that will compete with their own for nothing. In addition to not making very much money in return for the significant effort required in manufacturing Apple's cars, helping Apple enter the market will make their own plight worse, as it will be yet another big name competing for the very small pool of high end carbuyers. Even if they aren't going to be directly competing with Apple, any company that partners with Apple is going to want IP to help their own cars compete with Toyota, Ford and everybody else. Again, this is different from electronics where the only major Apple supplier that is still competing directly with Apple with their own products is Samsung. TSMC, Foxconn and the rest aren't.
Multiple car companies have stated that it isn't in their financial interests to be Apple's Foxconn equivalent. They aren't going to make anything worth mentioning in margins. They aren't getting a percentage of each car sold. They aren't going to be getting facilities to manufacture their own cars. They won't even get IP that they can use to make their own cars better. Yet Apple fans insist on regurgitating stuff like "partnering with companies who were hungry and succeeding against companies that too satiated to try something different" when in fact these companies aren't partnering with Apple because they would lose more money than they would gain and would probably wind up going out of business.
Foxconn isn't "hungrier" than these car companies. Instead, they are able to survive and thrive in a totally different industry where they can turn low margins into profits with high volumes and use their facilities to build products for multiple companies, and they don't need to make and sell their own line of phones, tablets and PCs as their primary revenue source for survival. And if that wasn't the case, Foxconn wouldn't do business with Apple either. It wouldn't be in their interests to.
I'm not convinced that Foxcon would be able to be a quality automotive partner. Vehicles and electronics are constructed very differently. Just looks what happens when an auto company designs their own head units for a car. Uggh.
Another option would be for Apple to use some of its $76 billion in cash and marketable securities to purchase a controlling interest in an existing automotive company. For instance, the market cap of GM is $81 billion.
See above (and I have made this point before).
1. It takes two to tango. No car company would agree to sell to Apple. 2. Even were Apple to find a willing seller, the antitrust regulators would never approve it. Remember: they never actually approved Google's purchase of tiny failing FitBit. Google just went ahead and did it because they know that the Biden administration is going to break them up into 2 or more companies by 2023 anyway. 3. And what - exactly - would Apple and their progressive environmentalist reputation do with GM's polluting factories? Their extensive line of internal combustion engine cars, including the ones that they are still legally obligated to manufacture and service? Are GM's extensive network of automobile retailer franchises going to be converted into AppleCare centers? And what if GM's massive union workforce? Shifting from ICE cars to AVs and EVs would mean laying the vast majority of them off.
You really haven't figured it out: Apple is able to be the corporate good guy that everyone loves because they never get their hands dirty. They outsource the polluting factories that pay low wages for people in terrible working conditions in authoritarian regimes like China and Viet Nam to their partners like Foxconn. Buying a car company would mean having to deal with their own factories and workers and all that entails.
So much of the experience of traditional automakers isn't really relevant to BEV manufacturing, which is why Tesla was able to build up its own manufacturing capability.
We take it for granted, but an internal combustion engine, plus all of the cooling and exhaust systems surrounding it, is a crazy complex (and dangerous) beast. It's kind of wild that we all blissfully ride around in metal boxes with a contained gasoline explosion occurring nonstop just a few feet away from us.
With a BEV, most of the complexity is the battery, and that will be outsourced to experienced firms.
It's true that the rest of a car is still more complex than a phone, in terms of the number of parts and the process of assembling them. But still -- it's not rocket science.
Certainly EV manufacturing is on an upward hype gradient. It's true that tail-pipe carbon emissions is zero for EV, but most of us want to see a lowering of total carbon emissions, which includes more than the tailpipe emissions but also cradle-to-grave carbon emissions.
Manufacturing of batteries is in no way carbon neutral. And, of course, the majority of electricity is generated by burning coal that will be used to recharge car batteries.
An example might be the estimate that the manufacturing of just the high capacity car batteries is equivalent to driving 90,000 miles in a standard auto.
I'd be interested in what Apple has in mind for it's car, given they emphasize their carbon footprint.
Best Alternative To a Negotiated Agreement (BATNA).
It's okay for Apple and these other manufacturers to walk away from negotiations. That's their best alternative -- at this point.
What has been reported is that Apple has been negotiating with companies who manufacture in the US. At this point, it looks like Apple Car jobs will not be coming to the US. One may bitch and moan about China, et al, taking American jobs, but the truth might be more like Americans, at the least their employers, don't see an upside to more American jobs.
Apple has succeeded partnering with companies who were hungry and succeeding against companies that too satiated to try something different.
Is Foxconn hungry? It does seem so.
Yeah, none of this is true. As I have stated several times, Apple wants to impose the same terms on the automobile industry that they are used to getting from the electronics industry. They refuse to acknowledge that the two spaces are entirely different. With the electronics industry you can survive on very low margins because the volume is huge. TSMC - for example - can get by on maybe $1-$5 per CPU that they make (just throwing it out there) because their chips are in like 2 billion smartphones, tablets, PCs etc. that are sold each year and the same facilities/equipment can be used for multiple clients (Apple, Qualcomm, AMD, MediaTek, Nvidia etc.) In automobiles the volume is much lower and the facilities and equipment can't be reused. While a parts facility can make parts for multiple manufacturers, a factory to assemble cars from those parts will usually only make cars for one company, and often even a single line of cars for one company (diesel pickups, gas SUVs and electric compacts aren't made at the same factory).
Another thing: these companies aren't going to line up to help Apple make cars that will compete with their own for nothing. In addition to not making very much money in return for the significant effort required in manufacturing Apple's cars, helping Apple enter the market will make their own plight worse, as it will be yet another big name competing for the very small pool of high end carbuyers. Even if they aren't going to be directly competing with Apple, any company that partners with Apple is going to want IP to help their own cars compete with Toyota, Ford and everybody else. Again, this is different from electronics where the only major Apple supplier that is still competing directly with Apple with their own products is Samsung. TSMC, Foxconn and the rest aren't.
Multiple car companies have stated that it isn't in their financial interests to be Apple's Foxconn equivalent. They aren't going to make anything worth mentioning in margins. They aren't getting a percentage of each car sold. They aren't going to be getting facilities to manufacture their own cars. They won't even get IP that they can use to make their own cars better. Yet Apple fans insist on regurgitating stuff like "partnering with companies who were hungry and succeeding against companies that too satiated to try something different" when in fact these companies aren't partnering with Apple because they would lose more money than they would gain and would probably wind up going out of business.
Foxconn isn't "hungrier" than these car companies. Instead, they are able to survive and thrive in a totally different industry where they can turn low margins into profits with high volumes and use their facilities to build products for multiple companies, and they don't need to make and sell their own line of phones, tablets and PCs as their primary revenue source for survival. And if that wasn't the case, Foxconn wouldn't do business with Apple either. It wouldn't be in their interests to.
I see that you have been at the negotiating table with Apple and the car manufacturers, given your detailed knowledge of Apple's positions.
Please, tell me more. I'm honored to be even be remotely connected to such genius as you seem to be.
Apple has $193.82 billion in cash. If they are serious about building a car, then they should just buy an existing automobile manufacturer. For example, Mazda is currently worth 5.44 billion.
1. In order to buy something the other party has to agree to sell which is something that Mazda would never do. 2. Not just Mazda but there are politicians involved. The Japanese government will never allow them to sell, and if you look at how Sony - now a fully American company (though they claim to be "global") is treating its Japanese workforce and consumers these days I do not blame them. 3. Not just the Japanese politicians. The global regulators would never approve of it either, for mostly illegitimate reasons - Apple would never be allowed to buy Beats in today's environment either, and Google outright defied them in closing their FitBit purchase because they know that their breakup is inevitable anyway - but for some legitimate ones too. 4. Finally, Apple has their reasons: their cherished reputation as a progressive, beneficial environmentalist company ... the "good" as opposed to the "bad" Google, Facebook, Amazon, Uber, oil companies etc. Were they to buy a company that currently makes ICE (internal combustion engine) cars, they would join the ranks of the evil polluters. However, scrapping the ICE operations in favor of EV ones would put a ton of high-salary employees out of work. It would also have Apple take on billions in annual losses on operations for years as right now the market for EVs is tiny compared to ICEs.
So please, no talk about why Apple should buy this car company or that one. Any car company you name will run into at least 3 of the 4 barriers above. Apple really does need to go back to Kia/Hyundai with terms that both entities can agree on, which would be Apple paying Kia/Hyundai more money to be their manufacturing partner and licensing them some of their IP to be their design partner. The idea that any car company was ever going to accept being Foxconn was always absurd.
Apple has $193.82 billion in cash. If they are serious about building a car, then they should just buy an existing automobile manufacturer. For example, Mazda is currently worth 5.44 billion.
I think Mazda is already outsourcing a lot of its own manufacturing but I suppose it would give them some relationships already in place.
I’d love to see Apple do the assembly in Wisconsin at the site that was set aside for the Foxconn fiasco. Something good could actually come from the political theater that took place there. The people of Wisconsin and the US deserve better than what they’ve been dealt.
I’m curious as to what advantages taking over Mazda would provide to Apple. And this really applied to most automotive manufacturers. What does Mazda offer? 1) Experienced employees, that Apple can hire. 2) Manufacturing and assembly facilities, that are dated and not set up for EV assembly. What else am I missing? Serious question.
So much of the experience of traditional automakers isn't really relevant to BEV manufacturing, which is why Tesla was able to build up its own manufacturing capability.
We take it for granted, but an internal combustion engine, plus all of the cooling and exhaust systems surrounding it, is a crazy complex (and dangerous) beast. It's kind of wild that we all blissfully ride around in metal boxes with a contained gasoline explosion occurring nonstop just a few feet away from us.
With a BEV, most of the complexity is the battery, and that will be outsourced to experienced firms.
It's true that the rest of a car is still more complex than a phone, in terms of the number of parts and the process of assembling them. But still -- it's not rocket science.
Agree with most of your points however keep in mind Tesla essentially was gifted an existing auto plant in Fremont CA and is full of seasoned automotive engineering experts from many traditional OEMs. I personally know several of them. Apple is hiring the same type of seasoned engineers of course.
I would claim that any modern car is far more complex than you or most realize, or can even imagine. The various layers of safety and communications between dozens of complex electromechanical devices is staggering. Vehicle engineering is more than just finding or designing separate systems and components. It’s about the integration and tuning. Many cars these days have well over 20 million lines of code not even including the infotainment. It’s one thing when an iPhone locks up or malfunctions or is hacked, completely different when you have a vehicle barreling down a road with passenger and pedestrian lives at stake.
Add autonomous capability, which is considered the mother of AI, and the complexity compounds. Flying and landing a plane or rocket on autopilot is certainly an engineering feat, but mostly there’s nothing to hit up there, whereas the road is full of constant various challenges, many of which are unpredictable.
Not saying Apple hasn’t learned all this and is incapable of delivering a legitimate vehicle one way or another, rather just pointing out that the challenge is far greater than most realize, even with nearly unlimited funds.
Manufacturing of batteries is in no way carbon neutral. And, of course, the majority of electricity is generated by burning coal that will be used to recharge car batteries.
An example might be the estimate that the manufacturing of just the high capacity car batteries is equivalent to driving 90,000 miles in a standard auto.
I'd be interested in what Apple has in mind for it's car, given they emphasize their carbon footprint.
This statement seems misleading to me. Manufacturing of batteries can, in every single way imaginable, be 100% carbon neutral. Every other aspect of building a BEV can also be carbon neutral. The issue is -- what is the source of energy used to make all of these things?
In the United States, less than 20% of electricity is generated by coal (far less than the majority that you assert):
The reason is simple -- renewables are cheaper because the fuel is free and we've reached the economies of scale necessary to build renewable generation capacity at much lower costs than before.
So much of the experience of traditional automakers isn't really relevant to BEV manufacturing, which is why Tesla was able to build up its own manufacturing capability.
We take it for granted, but an internal combustion engine, plus all of the cooling and exhaust systems surrounding it, is a crazy complex (and dangerous) beast. It's kind of wild that we all blissfully ride around in metal boxes with a contained gasoline explosion occurring nonstop just a few feet away from us.
With a BEV, most of the complexity is the battery, and that will be outsourced to experienced firms.
It's true that the rest of a car is still more complex than a phone, in terms of the number of parts and the process of assembling them. But still -- it's not rocket science.
Agree with most of your points however keep in mind Tesla essentially was gifted an existing auto plant in Fremont CA and is full of seasoned automotive engineering experts from many traditional OEMs. I personally know several of them. Apple is hiring the same type of seasoned engineers of course.
I would claim that any modern car is far more complex than you or most realize, or can even imagine. The various layers of safety and communications between dozens of complex electromechanical devices is staggering. Vehicle engineering is more than just finding or designing separate systems and components. It’s about the integration and tuning. Many cars these days have well over 20 million lines of code not even including the infotainment. It’s one thing when an iPhone locks up or malfunctions or is hacked, completely different when you have a vehicle barreling down a road with passenger and pedestrian lives at stake.
Add autonomous capability, which is considered the mother of AI, and the complexity compounds. Flying and landing a plane or rocket on autopilot is certainly an engineering feat, but mostly there’s nothing to hit up there, whereas the road is full of constant various challenges, many of which are unpredictable.
Not saying Apple hasn’t learned all this and is incapable of delivering a legitimate vehicle one way or another, rather just pointing out that the challenge is far greater than most realize, even with nearly unlimited funds.
Best Alternative To a Negotiated Agreement (BATNA).
It's okay for Apple and these other manufacturers to walk away from negotiations. That's their best alternative -- at this point.
What has been reported is that Apple has been negotiating with companies who manufacture in the US. At this point, it looks like Apple Car jobs will not be coming to the US. One may bitch and moan about China, et al, taking American jobs, but the truth might be more like Americans, at the least their employers, don't see an upside to more American jobs.
Apple has succeeded partnering with companies who were hungry and succeeding against companies that too satiated to try something different.
Is Foxconn hungry? It does seem so.
Yeah, none of this is true. As I have stated several times, Apple wants to impose the same terms on the automobile industry that they are used to getting from the electronics industry. They refuse to acknowledge that the two spaces are entirely different. With the electronics industry you can survive on very low margins because the volume is huge. TSMC - for example - can get by on maybe $1-$5 per CPU that they make (just throwing it out there) because their chips are in like 2 billion smartphones, tablets, PCs etc. that are sold each year and the same facilities/equipment can be used for multiple clients (Apple, Qualcomm, AMD, MediaTek, Nvidia etc.) In automobiles the volume is much lower and the facilities and equipment can't be reused. While a parts facility can make parts for multiple manufacturers, a factory to assemble cars from those parts will usually only make cars for one company, and often even a single line of cars for one company (diesel pickups, gas SUVs and electric compacts aren't made at the same factory).
You can state whatever you like, but that doesn’t change that you’re just some guy on the internet — you don’t know any of it. Apple has never confirmed project titan and they certainly haven’t stated what sort of financial terms they want from possible manufacturing deals. You have no clue, just like the rest of us.
Apple has $193.82 billion in cash. If they are serious about building a car, then they should just buy an existing automobile manufacturer. For example, Mazda is currently worth 5.44 billion.
I think Mazda is already outsourcing a lot of its own manufacturing but I suppose it would give them some relationships already in place.
I’d love to see Apple do the assembly in Wisconsin at the site that was set aside for the Foxconn fiasco. Something good could actually come from the political theater that took place there. The people of Wisconsin and the US deserve better than what they’ve been dealt.
The Foxconn Wisconsin site was not designed for the manufacture of cars -- the promise was screens.
Janesville Wisconsin was the site of a GM plant. Closed of course. Is there still a source of labor and skill from there? But, there is no mass transit to bring the labor to the Foxconn site. True to form, Republican Governor Walker way back when, made sure to kill a train line, part of Obama's economic recovery proposals that might have been useful for this purpose.
The Foxconn Wisconsin site is basically just a huge patch of unused earth and a handful of nearly empty buildings. They can pretty much build anything there because it's basically empty. They probably don't need huge power capacity like a foundry would require, but it sounds like they put in a crapload of infrastructure already for the phantom Foxconn facilities.
Yeah, the ability to tap into an existing labor pool with automotive experience is a good question. You could probably look at what happened with the GM-Toyota NUMMI plant in Fremont, CA that was taken over by Tesla or the recently closed GM Lordstown, OH plant that's being converted to electric pickup trucks (Lordstown Motors) to see whether there are any benefits from having previous production in a certain locale. From what I've seen, a good number of the more senior employees from a plant that's being closed get offered jobs in other locations so they've left town already. But there are usually a cluster of suppliers, contractors, and other spin-offs that surround a big plant, so if a new operation is started within a reasonable amount of time, some of those companies may still be viable. Also, some of the displaced workers who have family ties to a location that gets shut down may return if there are new jobs.
Don't know anything about the missed transportation initiatives other than knowing that several states, like Ohio, punted on the "stimulus" offers as well. The rationale was that once the states took over maintenance and upkeep they could not afford to keep it going. All I know is that the location of the faux Foxconn operation in Wisconsin has good proximity to Chicago and Milwaukee (and other smaller cities) and the Great Lakes with good air/road transportation access to a large population base in the US and Canada. You also have some of the biggest players in industrial automation nearby.
Not to minimize the challenge of manufacturing at scale, whether automotive or mobile electronics, but the thought occurred to me:
1. There are a lot of small custom car shops that can build an entire, street legal car, practically from the ground up, using small scale manufacturing techniques and purchase of key drive train and suspension components.
2. To my knowledge, there are no small custom mobile phone shops that can build an entire smart phone with anywhere near the same form factor or features.
The only way to get to # 2 is by sophisticated engineering and manufacturing at scale. Key components may be available by others, but putting it all together is a big deal.
The process to get to # 1 at scale seems way more straightforward. Again, not to minimize what it takes to build a car, but if a few guys in a shop can do it, certainly any large manufacturer with billions of dollars (and the will) can do it if what we are talking about are essentially large scale "screwdriver plants." Everything, from key drive train and suspension components to many other sub-assemblies (like batteries), and even to manufacturing robots capable of automotive assembly are available from many suppliers at scale. I don't see that buying an existing car company would make this happen any faster. Partnering with an existing car company could have some advantage, but many independent automotive contract manufacturers already exist (including whole car contractors like Magna Steyr). After all, Tesla did it without a car company partner (the Fremont facility could well have been an advantage, but not the same as a partnership), so I don't see why Apple with or without Foxconn couldn't do it too.
Like an Intel MacBook, most of it is made of off-the-shelf parts (or easily copied parts) that are simply assembled together.
If you laid out all the parts going into a car (especially and EV with a reduced number of parts) I think it is safe to say that the vast majority of them ( from brakes to door handles to seats) can be easily purchased from 3rd parties to then be assembled into a cohesive whole called an "Apple Car".
So I guess JC Whitney is going to be getting one hell of an order.
Seriously though, I’ve worked on a couple of plant startups and things like stamping processes, chassis assembly which is typically done by welding robots, painting, also done by robots, assembly stations, all of the heavy load material handling equipment like conveyors, monorail, AGVs, etc., don’t strike me as something that would transfer easily from iPhone/iPad assembly to automotive assembly. Some of the machinery required, like stamping presses take many months to build.
I’m sure Foxconn could do it with an experienced partner and the right training. Look at Tesla. Plus, lots of subassemblies, up to and including the stamping requirements, and major components get outsourced anyway. I’ve only worked at one plant in North America that did pretty much everything onsite, getting raw materials in one end and pushing fully assembled cars out the other. Most plants are very specialized, so I’d assume that if Foxconn is involved they’d just be doing final assembly and perhaps paint shop stuff. Other suppliers would ship the bodies in white to them.
With a global supply chain and cheap transportation, that would be, I think, very doable.
Essentially, it would be the same model as used for the iPhone which Apple is comfortable with.
And, like with the iPhone, Apple would let others do the heavy lifting while they maintained control.
And that final assembly would be simpler than for a conventional car simply because there would be less assembly.
Apple has $193.82 billion in cash. If they are serious about building a car, then they should just buy an existing automobile manufacturer. For example, Mazda is currently worth 5.44 billion.
I think Mazda is already outsourcing a lot of its own manufacturing but I suppose it would give them some relationships already in place.
I’d love to see Apple do the assembly in Wisconsin at the site that was set aside for the Foxconn fiasco. Something good could actually come from the political theater that took place there. The people of Wisconsin and the US deserve better than what they’ve been dealt.
The Foxconn Wisconsin site was not designed for the manufacture of cars -- the promise was screens.
Janesville Wisconsin was the site of a GM plant. Closed of course. Is there still a source of labor and skill from there? But, there is no mass transit to bring the labor to the Foxconn site. True to form, Republican Governor Walker way back when, made sure to kill a train line, part of Obama's economic recovery proposals that might have been useful for this purpose.
All good points -- but I think you missed his.
I think he was wondering if Foxconn can be trusted with U.S. manufacturing since they already stiffed us once.
I think, if it is asked as a question rather than an accusation, it is a valid question and one that Foxconn should answer before we give them a second chance -- because you know the U.S. will be building out infrastructure while providing them with incentives. Should we do it again?
Best Alternative To a Negotiated Agreement (BATNA).
It's okay for Apple and these other manufacturers to walk away from negotiations. That's their best alternative -- at this point.
What has been reported is that Apple has been negotiating with companies who manufacture in the US. At this point, it looks like Apple Car jobs will not be coming to the US. One may bitch and moan about China, et al, taking American jobs, but the truth might be more like Americans, at the least their employers, don't see an upside to more American jobs.
Apple has succeeded partnering with companies who were hungry and succeeding against companies that too satiated to try something different.
Is Foxconn hungry? It does seem so.
Yeah, none of this is true. As I have stated several times, Apple wants to impose the same terms on the automobile industry that they are used to getting from the electronics industry. They refuse to acknowledge that the two spaces are entirely different. With the electronics industry you can survive on very low margins because the volume is huge. TSMC - for example - can get by on maybe $1-$5 per CPU that they make (just throwing it out there) because their chips are in like 2 billion smartphones, tablets, PCs etc. that are sold each year and the same facilities/equipment can be used for multiple clients (Apple, Qualcomm, AMD, MediaTek, Nvidia etc.) In automobiles the volume is much lower and the facilities and equipment can't be reused. While a parts facility can make parts for multiple manufacturers, a factory to assemble cars from those parts will usually only make cars for one company, and often even a single line of cars for one company (diesel pickups, gas SUVs and electric compacts aren't made at the same factory).
Another thing: these companies aren't going to line up to help Apple make cars that will compete with their own for nothing. In addition to not making very much money in return for the significant effort required in manufacturing Apple's cars, helping Apple enter the market will make their own plight worse, as it will be yet another big name competing for the very small pool of high end carbuyers. Even if they aren't going to be directly competing with Apple, any company that partners with Apple is going to want IP to help their own cars compete with Toyota, Ford and everybody else. Again, this is different from electronics where the only major Apple supplier that is still competing directly with Apple with their own products is Samsung. TSMC, Foxconn and the rest aren't.
Multiple car companies have stated that it isn't in their financial interests to be Apple's Foxconn equivalent. They aren't going to make anything worth mentioning in margins. They aren't getting a percentage of each car sold. They aren't going to be getting facilities to manufacture their own cars. They won't even get IP that they can use to make their own cars better. Yet Apple fans insist on regurgitating stuff like "partnering with companies who were hungry and succeeding against companies that too satiated to try something different" when in fact these companies aren't partnering with Apple because they would lose more money than they would gain and would probably wind up going out of business.
Foxconn isn't "hungrier" than these car companies. Instead, they are able to survive and thrive in a totally different industry where they can turn low margins into profits with high volumes and use their facilities to build products for multiple companies, and they don't need to make and sell their own line of phones, tablets and PCs as their primary revenue source for survival. And if that wasn't the case, Foxconn wouldn't do business with Apple either. It wouldn't be in their interests to.
Perhaps, maybe, your assumption is wrong.
Perhaps autos will be going the way of PCs -- where they simply become commodities produced by low margined third parties.
Think about the U.S. auto market: It thrived not on technical advances but on emotional appeal (the big, shiny red convertible)
Then the Japanese trounced them. But not with any technical advances but with quality manufacturing.
Now, and especially with highly simplified EVs, the emphasis will be technical advances -- just like PCs. And that can only carry high margins as long as those technical advances continue to leap frog each other year by year. But eventually the advances level off and the product becomes a commodity.
What will be the appeal of one EV over another -- especially a self driving one? It won't be in the emotional appeal that has fueled the market so far.
So much of the experience of traditional automakers isn't really relevant to BEV manufacturing, which is why Tesla was able to build up its own manufacturing capability.
We take it for granted, but an internal combustion engine, plus all of the cooling and exhaust systems surrounding it, is a crazy complex (and dangerous) beast. It's kind of wild that we all blissfully ride around in metal boxes with a contained gasoline explosion occurring nonstop just a few feet away from us.
With a BEV, most of the complexity is the battery, and that will be outsourced to experienced firms.
It's true that the rest of a car is still more complex than a phone, in terms of the number of parts and the process of assembling them. But still -- it's not rocket science.
Agree with most of your points however keep in mind Tesla essentially was gifted an existing auto plant in Fremont CA and is full of seasoned automotive engineering experts from many traditional OEMs. I personally know several of them. Apple is hiring the same type of seasoned engineers of course.
I would claim that any modern car is far more complex than you or most realize, or can even imagine. The various layers of safety and communications between dozens of complex electromechanical devices is staggering. Vehicle engineering is more than just finding or designing separate systems and components. It’s about the integration and tuning. Many cars these days have well over 20 million lines of code not even including the infotainment. It’s one thing when an iPhone locks up or malfunctions or is hacked, completely different when you have a vehicle barreling down a road with passenger and pedestrian lives at stake.
Add autonomous capability, which is considered the mother of AI, and the complexity compounds. Flying and landing a plane or rocket on autopilot is certainly an engineering feat, but mostly there’s nothing to hit up there, whereas the road is full of constant various challenges, many of which are unpredictable.
Not saying Apple hasn’t learned all this and is incapable of delivering a legitimate vehicle one way or another, rather just pointing out that the challenge is far greater than most realize, even with nearly unlimited funds.
Ok, assuming that that is all true -- which I'm sure it is. But that does exclude all of that being done elsewhere and the final assembly done by an assembler like Foxconn.
If nothing else, we have the example of a modern American car that integrates manufacturing plants all over North America.
Henry Ford pioneered the vertical integration model -- where everything (from mining the ore to making the steel to making the car) was done all under a single umbrella. At the time, it was revolutionary. But, perhaps, in a global world, that model has been passed by....
Best Alternative To a Negotiated Agreement (BATNA).
It's okay for Apple and these other manufacturers to walk away from negotiations. That's their best alternative -- at this point.
What has been reported is that Apple has been negotiating with companies who manufacture in the US. At this point, it looks like Apple Car jobs will not be coming to the US. One may bitch and moan about China, et al, taking American jobs, but the truth might be more like Americans, at the least their employers, don't see an upside to more American jobs.
Apple has succeeded partnering with companies who were hungry and succeeding against companies that too satiated to try something different.
Is Foxconn hungry? It does seem so.
Yeah, none of this is true. As I have stated several times, Apple wants to impose the same terms on the automobile industry that they are used to getting from the electronics industry. They refuse to acknowledge that the two spaces are entirely different. With the electronics industry you can survive on very low margins because the volume is huge. TSMC - for example - can get by on maybe $1-$5 per CPU that they make (just throwing it out there) because their chips are in like 2 billion smartphones, tablets, PCs etc. that are sold each year and the same facilities/equipment can be used for multiple clients (Apple, Qualcomm, AMD, MediaTek, Nvidia etc.) In automobiles the volume is much lower and the facilities and equipment can't be reused. While a parts facility can make parts for multiple manufacturers, a factory to assemble cars from those parts will usually only make cars for one company, and often even a single line of cars for one company (diesel pickups, gas SUVs and electric compacts aren't made at the same factory).
You can state whatever you like, but that doesn’t change that you’re just some guy on the internet — you don’t know any of it. Apple has never confirmed project titan and they certainly haven’t stated what sort of financial terms they want from possible manufacturing deals. You have no clue, just like the rest of us.
So, his opinion differs from yours -- so you fall back on the "You're just some guy on the internet" mantra.
Comments
We take it for granted, but an internal combustion engine, plus all of the cooling and exhaust systems surrounding it, is a crazy complex (and dangerous) beast. It's kind of wild that we all blissfully ride around in metal boxes with a contained gasoline explosion occurring nonstop just a few feet away from us.
With a BEV, most of the complexity is the battery, and that will be outsourced to experienced firms.
It's true that the rest of a car is still more complex than a phone, in terms of the number of parts and the process of assembling them. But still -- it's not rocket science.
Another option would be for Apple to use some of its $76 billion in cash and marketable securities to purchase a controlling interest in an existing automotive company. For instance, the market cap of GM is $81 billion.
Another thing: these companies aren't going to line up to help Apple make cars that will compete with their own for nothing. In addition to not making very much money in return for the significant effort required in manufacturing Apple's cars, helping Apple enter the market will make their own plight worse, as it will be yet another big name competing for the very small pool of high end carbuyers. Even if they aren't going to be directly competing with Apple, any company that partners with Apple is going to want IP to help their own cars compete with Toyota, Ford and everybody else. Again, this is different from electronics where the only major Apple supplier that is still competing directly with Apple with their own products is Samsung. TSMC, Foxconn and the rest aren't.
Multiple car companies have stated that it isn't in their financial interests to be Apple's Foxconn equivalent. They aren't going to make anything worth mentioning in margins. They aren't getting a percentage of each car sold. They aren't going to be getting facilities to manufacture their own cars. They won't even get IP that they can use to make their own cars better. Yet Apple fans insist on regurgitating stuff like "partnering with companies who were hungry and succeeding against companies that too satiated to try something different" when in fact these companies aren't partnering with Apple because they would lose more money than they would gain and would probably wind up going out of business.
Foxconn isn't "hungrier" than these car companies. Instead, they are able to survive and thrive in a totally different industry where they can turn low margins into profits with high volumes and use their facilities to build products for multiple companies, and they don't need to make and sell their own line of phones, tablets and PCs as their primary revenue source for survival. And if that wasn't the case, Foxconn wouldn't do business with Apple either. It wouldn't be in their interests to.
1. It takes two to tango. No car company would agree to sell to Apple.
2. Even were Apple to find a willing seller, the antitrust regulators would never approve it. Remember: they never actually approved Google's purchase of tiny failing FitBit. Google just went ahead and did it because they know that the Biden administration is going to break them up into 2 or more companies by 2023 anyway.
3. And what - exactly - would Apple and their progressive environmentalist reputation do with GM's polluting factories? Their extensive line of internal combustion engine cars, including the ones that they are still legally obligated to manufacture and service? Are GM's extensive network of automobile retailer franchises going to be converted into AppleCare centers? And what if GM's massive union workforce? Shifting from ICE cars to AVs and EVs would mean laying the vast majority of them off.
You really haven't figured it out: Apple is able to be the corporate good guy that everyone loves because they never get their hands dirty. They outsource the polluting factories that pay low wages for people in terrible working conditions in authoritarian regimes like China and Viet Nam to their partners like Foxconn. Buying a car company would mean having to deal with their own factories and workers and all that entails.
Manufacturing of batteries is in no way carbon neutral. And, of course, the majority of electricity is generated by burning coal that will be used to recharge car batteries.
An example might be the estimate that the manufacturing of just the high capacity car batteries is equivalent to driving 90,000 miles in a standard auto.
I'd be interested in what Apple has in mind for it's car, given they emphasize their carbon footprint.
Please, tell me more. I'm honored to be even be remotely connected to such genius as you seem to be.
I would claim that any modern car is far more complex than you or most realize, or can even imagine. The various layers of safety and communications between dozens of complex electromechanical devices is staggering. Vehicle engineering is more than just finding or designing separate systems and components. It’s about the integration and tuning. Many cars these days have well over 20 million lines of code not even including the infotainment. It’s one thing when an iPhone locks up or malfunctions or is hacked, completely different when you have a vehicle barreling down a road with passenger and pedestrian lives at stake.
Add autonomous capability, which is considered the mother of AI, and the complexity compounds. Flying and landing a plane or rocket on autopilot is certainly an engineering feat, but mostly there’s nothing to hit up there, whereas the road is full of constant various challenges, many of which are unpredictable.
Not saying Apple hasn’t learned all this and is incapable of delivering a legitimate vehicle one way or another, rather just pointing out that the challenge is far greater than most realize, even with nearly unlimited funds.
In the United States, less than 20% of electricity is generated by coal (far less than the majority that you assert):
https://www.eia.gov/tools/faqs/faq.php?id=427&t=3
Nuclear is 20%, renewables are 20%. Most of the rest is natural gas.
And this is changing fast. The vast majority (70%) of additions in generation capacity are renewables:
https://www.eia.gov/todayinenergy/detail.php?id=46416
The reason is simple -- renewables are cheaper because the fuel is free and we've reached the economies of scale necessary to build renewable generation capacity at much lower costs than before.
So quit your whining and just buy a BEV already.
I agree on all points.
Yeah, the ability to tap into an existing labor pool with automotive experience is a good question. You could probably look at what happened with the GM-Toyota NUMMI plant in Fremont, CA that was taken over by Tesla or the recently closed GM Lordstown, OH plant that's being converted to electric pickup trucks (Lordstown Motors) to see whether there are any benefits from having previous production in a certain locale. From what I've seen, a good number of the more senior employees from a plant that's being closed get offered jobs in other locations so they've left town already. But there are usually a cluster of suppliers, contractors, and other spin-offs that surround a big plant, so if a new operation is started within a reasonable amount of time, some of those companies may still be viable. Also, some of the displaced workers who have family ties to a location that gets shut down may return if there are new jobs.
Don't know anything about the missed transportation initiatives other than knowing that several states, like Ohio, punted on the "stimulus" offers as well. The rationale was that once the states took over maintenance and upkeep they could not afford to keep it going. All I know is that the location of the faux Foxconn operation in Wisconsin has good proximity to Chicago and Milwaukee (and other smaller cities) and the Great Lakes with good air/road transportation access to a large population base in the US and Canada. You also have some of the biggest players in industrial automation nearby.
1. There are a lot of small custom car shops that can build an entire, street legal car, practically from the ground up, using small scale manufacturing techniques and purchase of key drive train and suspension components.
2. To my knowledge, there are no small custom mobile phone shops that can build an entire smart phone with anywhere near the same form factor or features.
The only way to get to # 2 is by sophisticated engineering and manufacturing at scale. Key components may be available by others, but putting it all together is a big deal.
The process to get to # 1 at scale seems way more straightforward. Again, not to minimize what it takes to build a car, but if a few guys in a shop can do it, certainly any large manufacturer with billions of dollars (and the will) can do it if what we are talking about are essentially large scale "screwdriver plants." Everything, from key drive train and suspension components to many other sub-assemblies (like batteries), and even to manufacturing robots capable of automotive assembly are available from many suppliers at scale. I don't see that buying an existing car company would make this happen any faster. Partnering with an existing car company could have some advantage, but many independent automotive contract manufacturers already exist (including whole car contractors like Magna Steyr). After all, Tesla did it without a car company partner (the Fremont facility could well have been an advantage, but not the same as a partnership), so I don't see why Apple with or without Foxconn couldn't do it too.
So, his opinion differs from yours -- so you fall back on the "You're just some guy on the internet" mantra.