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