Apple Inc (NASDAQ: AAPL) may have a car by 2024. Or, it might not. It depends on which rumors people believe. The latest media report is that a deal is pending with either South Korea’s Kia or the same nation’s Hyundai brand. The company that should be most worried about Apple’s move is Tesla.
Tesla Inc. (NASDAQ: TSLA) leads the global market in electric vehicle (EV) sales. It shipped 500,000 cars last year. Every major manufacturer has pledged it will catch Tesla. Volkswagen, General Motors Corporation, and The Ford Motor Company each plan to invest over $20 billion in EV models and autonomous cars. Their legacy reputations as fossil fuel-driven car manufacturers have triggered a good deal of skepticism about whether their brands can make the jump to EV. Even with good electric cars, consumers may be more likely to stay with Tesla. That, in turn, could lead to some odd alliances. A 24/7 Wall St. article pointed out, some car companies need Apple more than Apple needs them:
As with Ford, there would be nothing like an Apple partnership to jumpstart efforts. Along with the Apple brand, there is its balance sheet that has over $100 billion in cash, which it has not used much for M&A and which grows by the quarter.
The Apple brand has a number of advantages. Its hardware, particularly the iPhone, has been bought by hundreds of millions, if not over a billion people. The brand is known and highly regarded worldwide. It is often listed as the world’s most valuable brands. Tesla also does well on these brand valuation lists. Legacy car companies do horribly.
Apple’s jump to EV will not be easy, which should give Tesla supporters some comfort. It will have to put its electronics into vehicles which, for the most part, need to be made by another manufacturer. And the marriage will need to be perfect. Apple cannot risk its brand value with a product launch disaster.
If Apple does come to market with an EV, Tesla may have the first challenger with a brand more visible and more valuable than it is.
Click here to see Will Apple Turn To GM Or Ford In Electric Car Race?
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
