Why Apple could be Tesla’s fiercest rival in the EV game

Apple and Tesla
Tesla (TSLA) might have a formidable new challenger in the high-tech self-driving electric car game, and it’s coming from an unlikely place: Apple (AAPL). Rumors that Apple is finally getting its automotive ambitions off the ground are hotter than ever, and multiple reports say it might have a partner for its so-called “Apple Car” in Hyundai-Kia.

“For Tesla, Apple entering the EV race is a shot across the bow, and Hyundai is potentially a perfect EV marriage,” Wedbush analyst Dan Ives told Yahoo Finance.



Apple, like Tesla, would be entering the market with an outside perspective. And with its exceptional customer service knowledge, it could easily eliminate the drudgery of going to the local dealership. What’s more, Apple knows how to generate customer interest in its products, and comes with a built-in and loyal customer base. The company’s top-notch supply chain management, which CEO Tim Cook built out, would help it compete with Tesla even more.

Apple will surely have a long way to go to catch up with Tesla, but it might prove to be the kind of challenger to Musk’s empire that traditional automakers could only hope to be.

Project Titan takes on the EV titan

Apple has reportedly been working on building out its own vehicle since 2014. But the process on what’s known as Project Titan has proceeded in fits and starts. First, Apple was said to be working on building its own car from scratch. Then, it was just working on self-driving software, and now Apple is reportedly teaming with Hyundai to do the heavy lifting on overall vehicle architecture.

Because Apple will reportedly use Hyunda’s Kia plant in Georgia, it already has a leg up on Tesla — which had to build out its production capabilities. At one point in 2018, Musk was sleeping on the floor of Tesla’s production facility and set up an additional assembly line under an outdoor tent. Notably, Musk said he tried to get a meeting with Apple’s Cook at the time to sell the company to Apple. But Cook didn’t respond, according to Musk.

There are two big reasons Apple could rival Tesla — the tech giant understands how to please customers and it knows how to manufacture high-end products that people want but don’t need.

“No matter how you cut it, this will provide a rival to Tesla,” Patrick Moorhead of Moor Insights & Strategy told Yahoo Finance. “Like Tesla, Apple focuses on the experience, so I see them in the same sphere of competition.”

To understand Apple’s commitment to customer service, look no further than the Apple Store. You can walk in, talk to a salesperson, and you can get a phone on the spot. They don’t pester you to upgrade or buy accessories — they just set up your phone right away.

If Apple can bring that seamless approach to cars, something Tesla has managed, then the tech giant could change the game for the electric vehicle industry.



“Think about the areas of improvement for customer satisfaction,” Moorhead said. “Unless you drive a super premium car, dreading to go into the dealer. And then there’s the whole purchasing experience. I would expect them to change that whole dynamic.”

Apple also excels at positioning its products as semi-luxury devices, before releasing more affordable versions for everyday consumers. A splashy first-generation vehicle, similar to Tesla’s original Roadster, could drum up interest in a second-generation mid-range vehicle.

“I feel like they’re going to have to come out with a statement piece first, before they go after, let’s call it a mainstream type of audience,” Moorhead said.

There’s also the fact that Apple already has its own financing arm. By using favorable interest rates, the company could give its vehicles a wider potential consumer base.

Apple and Hyundai reportedly working toward a deal

Of course, there’s no guarantee that an Apple Car will hit the streets anytime soon.

As of now, reports indicate Apple and Hyundai are discussing building a self-driving, electric car. According to AppleInsider, citing TF Securities analyst and frequent Apple prognosticator Ming-Chi Kuo, Apple could use Hyundai’s recently announced E-GMP electric vehicle platform for the Apple Car. The Wall Street Journal reports Hyundai is already seeking partners to help build Apple’s car.



It might sound odd for Apple to team with a third-party to build its own vehicles, but that would align with its standard business practices. The iPhone maker already pays manufacturers from around the world, including in the U.S., to produce individual pieces for its various devices, before sending them off to be assembled by the likes of China’s Foxconn and others.

And part of that partnership means Apple spending to build out those manufacturers’ facilities. Doing so would provide Hyundai with even more incentive to work with Apple.

Right now, it’s unclear whether we’ll get a prototype of an Apple Car in 2022 or a mass market vehicle by 2024. But either way, Tesla might not lead the EV space for much longer.

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