According to a recent Bloomberg.com article, Apple has secretly been working on an electric vehicle (EV) and is pushing to begin production as early as 2020.
With such a quick timeframe and aggressive goal (automakers usually spend five to seven years developing a new car), Apple is potentially setting the stage for direct competition with Tesla Motors and General Motors, both of which are targeting a 2017 release of an EV that can go more than 200 miles on a single charge and cost less than $40,000.
“That’s the inflection point — the proving ground — that brings on the electric age,” Steve LeVine, author of “The Powerhouse,” a book about the automotive battery industry, said on Bloomberg TV. “Now you have Apple coming in and this is critical mass. Was GM really going to be able to match Tesla? Apple can.”
Apple, which posted record profit of $18B during the past quarter, has $178B in cash with few avenues to spend it. The Cupertino, California-based company’s R&D costs were $6.04B in the past year, and CEO Tim Cook is facing increased pressure to return cash to shareholders. The CEO has been pushing the iPhone maker to enter new categories to further envelop users’ digital lives with Apple’s products and services.
Also according to the article, Apple has been assembling an automotive team for the project by aggressively poaching employees from A123 Systems, a Waltham, Massachusetts-based battery maker. Apple has also hired battery experts from LG Chem, Samsung Electronics, Panasonic, Toshiba, and Johnson Controls. And, Tesla CEO Elon Musk told Bloomberg Businessweek that Apple was seeking to hire away his workers, offering $250,000 signing bonuses and 60 percent salary increases.
Apple is following the same path with EVs that it has taken with other products when breaking into a new industry. For example, the company wasn’t the first to make a digital-music player or smart phone; it only entered those markets once it had a product that redefined those categories.
Some parts of the automotive industry seem unfazed by Silicon Valley’s increasing interest in the market and even view it as a positive thing.
“We’re not afraid of these new competitors,” said Volkswagen AG Chief Executive Officer Martin Winterkorn. “The opposite is true: they encourage us to look more intensively into the chances of the digital world.”
To read the complete story, check out the full Bloomberg.com article.