Apple Aims For Electric Car Production By 2020

Apple Inc., which has been working secretly on a car, is pushing its team to begin production of an electric vehicle as early as 2020, people with knowledge of the matter said.

The timeframe -- automakers typically spend five to seven years developing a car -- underscores the project’s aggressive goals and could set the stage for a battle for customers with Tesla Motors Inc. and General Motors Co. Both automakers are targeting a 2017 release of an electric vehicle 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. “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 $18 billion during the past quarter, has $178 billion in cash with few avenues to spend it. The Cupertino, California-based company’s research and development costs were $6.04 billion in the past year, and Chief Executive Officer 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.

Apple’s possible foray into cars follows a similar path it’s taken to break into other industries. The company wasn't the first to make a digital-music player or smartphone, and only entered those markets once it had a product that redefined those categories.

Apple representatives declined to comment for this story.

Car Team

Tesla’s success in creating a startup car company has shown that the traditional barriers of entry into the auto industry aren't as difficult to overcome as originally thought, said one person, who asked not to be identified because the matter is private. At the same time, automakers have struggled to bring technical leaps to car development, something that Silicon Valley is also seeking to accomplish. For example, Google Inc. has invested in developing an autonomous vehicle since 2010.

“Apple would have some advantages as a new entrant to the auto industry,” including its cash, ability to connect with its own devices and the infancy of the electric-vehicle market, Barclays analysts Ben Reitzes and Brian Johnson wrote in a note to investors. “Finally, Apple’s brand – arguably the most important advantage – is a big attraction for the next generation of car customers.”

Apple may decide to scrap its car effort or delay it if executives are unhappy with progress, as they've done before with other secret projects, the people said. The car team, which already has about 200 people, began ramping up hiring within the past couple of months as the company sought out experts in technologies for batteries and robotics, said one of the people.

Battery Lawsuit

An experienced automaker typically spends five to seven years developing a new vehicle before bringing it to market, according to Dennis Virag, president of Automotive Consulting Group.

“If you're starting from scratch, you're probably talking more like 10 years,” Virag said. “A car is a very complex technological machine.”
A lawsuit filed this month gives a window into Apple’s efforts to create a automotive team for the project. Apple began around June an “aggressive campaign to poach” employees from A123 Systems LLC, the Waltham, Massachusetts-based battery maker said in the lawsuit.

Apple hired five people from A123 and has tried to hire battery experts from LG Chem Ltd., Samsung Electronics Co., Panasonic Corp., Toshiba Corp. and Johnson Controls Inc., according to the lawsuit.

“Apple is currently developing a large-scale battery division to compete in the very same field as A123,” the battery maker said in a separate state-court filing.

The recent hiring effort at A123 began with Mujeeb Ijaz, a former Ford Motor Co. engineer, who founded A123’s Venture Technologies division, which focused on materials research, cell product development and advanced concepts. He began at Apple in June and began hiring direct reports from A123’s venture technologies division, which he had headed.
Tesla CEO Elon Musk said that Apple was seeking to hire away his workers, offering $250,000 signing bonuses and 60 percent salary increases.

Bricks and Mortar

“Apple is good at developing technology but car making is, and will continue to be, a bricks-and-mortar proposition,” Matt DeLorenzo, an analyst at Kelley Blue Book, wrote in an e-mail. “Apple will need a partner, perhaps a Chinese manufacturer, with an infrastructure if it’s going to hit the five-year goal.”

Some parts of the automotive industry seem unfazed by Silicon Valley’s increasing interest in the market. Last month, before Apple’s efforts were revealed, Volkswagen AG Chief Executive Officer Martin Winterkorn brushed off the increasing competition.

“We’re not afraid of these new competitors,” Winterkorn said at a reception outside Stuttgart, Germany. “The opposite is true: they encourage us to look more intensively into the chances of the digital world.”

Don't know how I feel about this...

Think they will just stick with their naming plan so far and go with iCar?

I think I read somewhere while trying to find an okay article that the project name is "Titan".

I could be mistaken though.

I would think they wouldn't be able to keep that as an actual model name, because Nissan.

Electric car no thanks.

Yea, who would ever want to stop paying for gas, such a silly idea. I sure love that I get to fill up 3-4 times a month, wouldn't want it any other way.

The 40k price tag you probably won't recoup that price in gasoline savings.

This must be your daily driver.

Still laughing at this lol

i'll wait for the droid car hate the istore

Honestly, it probably seems like less to me because I drive an 86 F150 and the work truck is a 99 F350, both of which kinda hog fuel. We fuel up about twice what Kali does. (EDIT: Per truck.)

EDIT2: My actual opinion on the subject is "meh" due to Apple and their attempts to hire Tesla's employees. I just swapped from iPhone to Android and have found much more freedom in Android; Apple seems to release the same thing every year with slightly new designs and a new gimmick or two.

I'd like to see Tesla become the next Ford sans the stubbornness that almost took them under...twice. There were cars before Ford but Ford kinda brought them to the well-to-do Americans just as Tesla does now. Teslas are expensive but one day, we could all be driving one.

Apple should stick to what it is good at selling phones to hipsters and wannabe hipsters.

They don't even seem like a computer company anymore.

Apple may not innovate or invent anything, but their presence and name helps the competition try to "be better" than them, which only accelerates technology further.

I'm not an apple hater. I'll probably never own one of their products, but I think we'd be worse off without them.

So now instead of stealing other companies' technology, they're outright stealing their employees as well?

I hope Tesla runs them under in this field.

The only thing it accelerates is shitty designs, we can do without that.

Instead of investing in this they should invest their current products. All they do is minor upgrades (mainly phones) every year and people eat it up.

I never said their designs were good, but hop on the hate train all you want jet.

Apple doesn't invent anything, why would they start now?

I meant invest * I edited it now.

Until they make a vehicle that runs on electricity and can go over a thousand miles between charges, then I'll buy one.

Instead, I'll just take my Nitro when I want to invade America on my yearly trip.

That's their business model, and people (as you said) eat it up.

You don't need to make good products when your rabid fanbase will gladly overpay for garbage.

I'd take a nice BMW for 40k instead of a Apple car...

You know that bloatware and stuff you will never use on Android? Like stocks, service provider bloatware, sports apps pre-loaded on your phone? You don't need them? Delete them. On iPhone it isn't possible to remove bloatware without jailbreaking meaning teenage girls are stuck with a stocks app, people in wheelchairs are stuck with a fitness app that tells you how far you've walked, etc. You also can't install widgets on iPhone. They work well for my parents though, they can see the keypad.

Just reminds me of an episode of IT Crowd where there's an iPhone in a crane game.

'I could own an iPhone without giving any money to Apple!'

Why would they need to though, they already have their name. People buy their products because of the name, not because of new exclusive features.

The only reason they are getting into cars now is because others are. They aren't a company to ever make the first step in anything.

The fact is, people will buy their car because of the name. This will put interest in the electric car market, which will help build this demand in the industry.

To be honest, I prefer an iPhone over Android. They are actually better quality than most phones.

That being said, I don't go out and buy the latest/greatest iPhone. I went from a iPhone 3 to iPhone 5s, and I will probably keep this 5s until it wears out in a couple more years, then I'll buy the latest iPhone that's around.

That doesn't make much sense, how many cars can go 1000 miles without needing to refuel?

They'd be a great change for inner city vehicles. Heck I live 20~ minutes away from work, and I still only fill up about once every two weeks. Now for a long trip, if you didn't want to take the time even for the fast recharge (assuming there's a station near you anyway) then yeah I can see it, but for a daily short-medium driver they'd be more than enough.

I guess people want to pay 40k for electric cars. Even if I had the money I would pass.

I rather just the auto industry make better cars. You can keep your electric cars.

How would a car ever get to 1,000 miles if it can't start at 100, or 200, or 300?

I didn't post this topic because I think you all should buy one.