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Apple must wade through obstacles to catch up with next wave of self-driving EVs

The news: The Apple Car saga continues, with new reports revealing Apple is determined to ship an EV within the next four years, per Bloomberg.

How we got here: Apple’s car project has had various starts and stops, with a revolving door of executives taking over the project. Apple is reportedly trying to accelerate full self-driving car development and is aiming for a 2025 launch.

  • Apple was reported to be partnering with Hyundai-Kia for development of an Apple-branded EV back in February, aiming for a 2024 production run. However, Hyundai and Kia denied reports of an Apple partnership, an announcement that caused Hyundai’s shares to dip 6% and Kia’s 13% after the announcement.
  • Various high-profile departures from the Apple Car project reflect the tumultuous nature of the project. Two hundred employees were also reportedly laid off from the AV division in 2019.
  • Meanwhile, Apple has been busy recruiting automotive executives, namely from EV segment leader Tesla.

The bigger picture: Apple has placed the Apple Car project under the stewardship of Apple Watch software executive Kevin Lynch. His mandate is to produce an EV with full self-driving capabilities.

  • Apple is coming from behind in an industry that’s expected to take off within the next few years. The Biden administration and various carmakers are chasing an aggressive target to make EVs 50% of cars sold by 2030.
  • Bloomberg’s report states that Apple’s ideal car would have no steering wheel or pedals, with an interior designed for hands-free driving.
  • The company has been busy mapping US streets for its Maps app and already has a leadership position in infotainment with CarPlay. 
  • Apple will create the processor for the AV based on its work with Apple silicon processors for iOS and Mac devices.

What’s the catch? Coming from behind in an industry segment and then dominating it has been Apple’s niche for the iPod, iPhone, iPad, and Apple Watch—products that integrate hardware, software, app ecosystems, and Apple’s airtight control. Car manufacturing is an entirely different industry with unique challenges that could trip up new entrants. 

  • Without automotive manufacturing experience, Apple will have a difficult time with its EV and AV aspirations.
  • Not only is it playing catch-up in EV and AV technologies, Apple doesn’t seem to have a battery production and vehicle-charging ecosystem planned, which are key components to Tesla’s success.
  • Apple could go further by partnering with automakers and providing its expertise in software, cloud services, integration, and AI while leaning on carmakers’ expertise in manufacturing, maintenance, and support.