Gene Munster: Apple should buy Rivian after cancelling Apple Car
Loop Ventures analyst Gene Munster says Apple has to make a big move after cancelling the Apple Car, and that buying Rivian would be the answer.
Rivian R1T
Following the apparent cancellation of its Apple Car project, Munster has told CNBC that he was surprised by the move. "Because Apple is working on something doesn't mean it will see the light of day," he said, but argued that Apple will now need something big to replace it, if the company is to continue to grow.
"Apple's a tech company, and tech companies by definition need to grow," he said, "and that's the $400 billion question that they have."
"That's their revenue this year, and to grow a top line, they haven't grown their top line for the last six quarters," he continued. "And to grow the business, you gotta get into some big markets."
"Vision Pro has some potential, but that was kind of the shiny opportunity related to the car," said Munster. "[If Apple made a car then] if they get 10% of the automotive market, that would grow their top line by 60%."
Asked by CNBC host Brian Sullivan whether Apple might instead buy an existing EV manufacturer, Munster said that buying Rivian is "doable."
"And I think it does line up, Apple could do this, and I think that that would get them into that bigger market," he said. "I'm disappointed that this turn in events, and so I don't want to be predicting that they're going to ultimately do something like this."
"But I do think Apple needs to break into some new market," he continued, "they need to do something big, and potentially Rivian would be just the answer to that."
Separately, an Apple executive who reportedly helped start the Apple Car project, DJ Novotney, moved to Rivian in January 2024.
Regarding the growth potential of Apple, Gene Munster and his Loop Ventures firm has repeatedly predicted that it will shortly hit a $3 trillion market capitalization -- in 2019, 2020, and 2021. Munster also predicted Apple Vision Pro, then believed to be called Apple Glasses, would launch in 2021.
In this CNBC interview, Munster also commented that he was "famously wrong for predicting Apple Television that got killed in 2017."
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Comments
I don't think Apple needs to do a car at all and I don't think Apple thinks they need to do a car. If Apple does sell a car, I don't think they have much chance of grabbing 10% of the market. I'm sure I'd want one though.
Now I don't think Apple needs a car at all. But Rivian has a built in base now of pick up owners, they have the contract with Amazon for their electric delivery vans which is a nice, built sales flow. Rivian is also announcing a new vehicle this weekend.
But beyond a car, Apple is right to make a huge push into AI (how about building a processor to challenge the Nvidia H100?) and they should also be looking into quantum computing.
One other note is that Apple getting into cars never made sense other than the CarPlay angle. Good businesses do not diversify into products that are outside of their primary focus. Apple makes phones, computers and related accessories. They also do streaming of music/videos/podcasts and create content. Manufacturing cars is does not even remotely fit into their business model.
But Munster is not the smartest tool in the shed. He just throws stuff onto a wall and hopes something sticks. He previously forecast Apple will produce a TV for christ sake.
Precisely what I've been saying for years. There has never been any statement by Apple regarding ambitions to make a whole car and there have never been any glimpses of prototypes (the only thing anyone ever observed is Lexus RX SUVs with LiDAR equipment on the roof). It was always my opinion that Apple was going to extend their reach into cars via a, sort of, CarPlay 3.0. The upcoming new CarPlay already gives manufacturers the option to let CarPlay control/visualize more of a vehicle's core functions. It's easy to extrapolate a direction from that - e.g. give manufacturers an option for letting CarPlay provide self-driving capabilities.
An automobile is FAR outside the realm of personal electronics.
That’s a win-win for any company that partners with Apple.
Trying break into a saturated vehicle market is not.
https://rivian.com/newsroom/article/rivian-releases-fourth-quarter-full-year-2023-financial-results
Apple has never been in a position where it “must” build a vehicle to continue its growth. Not now and not for the foreseeable future. Apple should not be trying to “chase the money.” They should be chasing mastery and perfection in what they are very good at and build on success, not try to build on top of someone else’s failure. Until all of the kinks are worked out of the EV market and infrastructure, and they will eventually be, it’s a money pit.
Oh, forgot to mention, Rivian just laid off 10% of its salaried workforce.
Some of you guys make a convincing argument for why Apple's not considering any of this. If they wanted to buy Rivian or Fisker, it would be cheap though and maybe kick start things.
No it doesn't Disney is a money loser if Apple is bored build a Mac server, Apple Mesh router or a in house game engine Unity and Unreal are currently flaking out.....
And finish that Apple Modem the future depends on it. Getting the Apple Vision into a pair of glasses requires it.
https://www.canoo.com/
if their goal was to enter the car market, I always thought acquiring a company like Lucid would have made sense as their 900 volt charging remains top notch, and the design cues seemed very inspired by Apple in the first place