Will the Apple Car Be a Porsche? (Why Tesla Should Worry)
In 1963, movie fans were treated to seeing two of their favorite cinematic titans battle each other in “King Kong vs. Godzilla.”
We’re not going to tell you how it ended, in case you haven’t seen it, but rest assured, it was a humdinger.
‘My iPhone on Wheels?’
Now, nearly 40 years later, another epic battle could be brewing in the automotive world.
And the contest includes two of the most important developments in the auto sector since the Model T rolled off the assembly line: electric engines and autonomous vehicles.
On one side, we have Tesla (TSLA) – Get Tesla Inc Report, the electric vehicle sector’s reigning champion. On the other, we have computer giant Apple (AAPL) – Get Apple Inc. Report and Porsche (VWAGY) – Get Volkswagen AG Report.
Porsche is one of the luxury brands of the German giant Volkswagen, which wants to give it its independence in the coming months as we wrote in February.
There are no specifics, but Porsche CEO Oliver Blume said during a video conference on the annual earnings his people met with Apple’s people in California last year to discuss joint projects.
Blume said Porsche and Apple “continue to talk, but said it was too early for any specifics,” a spokesperson told TheStreet in an email statement.
These meetings between the representatives of the two recognizable brands around the world have launched speculation on a possible union to jointly develop vehicles together in the image of the partnership between Apple and Goldman Sachs (GS) – Get Goldman Sachs Group, Inc. Report. This last union is behind the Apple credit card, symbol of the ambitions of Tim Cook’s group in financial services.
“My iPhone on wheels?” one person on Twitter asked.
“VW Group and Apple make the most sense,” another commenter said. “VW is moving to electric partially as a way to change their image from the company that cheated with diesels. Partnering with Apple would also be a good look for VW.”
It wouldn’t be the first time that Apple and Porsche have teamed up.
The two companies have gotten together on projects in the past, including Apple CarPlay, which enables a car radio or head unit to be a display and a controller for an iOS device.
Porsche Plans to Go Fully Electric
Like all of the major auto makers, Porsche has plans to rid itself of the internal combustion engine in the very near future.
Blume said he expects more than 80% of the company’s newly sold vehicles to be fully electric in 2030.
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Tesla and Volkswagen are practically neighbors in Germany as both companies recently unveiled plans to operate electric vehicle manufacturing plants 140 miles away from each other.
As for Apple, the Cupertino, Calif. company has been working on its own car for several years. Dubbed “Project Titan,” the latest talk is that the company will launch a fully autonomous vehicle in 2025.
However, the status of Apple’s car plans is a bit cloudy.
Ming-Chi Kuo, an analyst with KGI Securities, tweeted on Tuesday that “the Apple Car project team has been dissolved for some time.”
“The reorganization within the next three to six months is necessary to achieve the goal of mass production by 2025,” he said.
Apple did not immediately respond to a request for comment.
Tesla’s Elon Musk has made self-driving vehicles a priority, telling analysts in January that the full-self-driving feature will become Tesla’s first engine of growth.
“Full-self-driving. So, over time, we think full-self-driving will become the most important source of profitability for Tesla. It’s — actually, if you run the numbers on robotaxis, it’s kind of nutty — it’s nutty good from a financial standpoint,” Musk said.
Hit the Road, Jack
Tesla is allowing thousands of people to try new and unfinished driver assistance features on public roads in the U.S. through a program called Full Self Driving Beta, or FSD Beta.
Federal regulators recently had some great news Tesla and General Motors (GM) – Get General Motors Company Report as they work on their autonomous vehicle projects.
The U.S. Department of Transportation’s National Highway Traffic Safety Administration issued an update this week that accounts for vehicles that do not have “the traditional manual controls associated with a human driver because they are equipped with automated driving systems.”
Musk said last year that he was considering releasing the Tesla Model 2 with no steering wheels or pedals.
All of this comes at a time Volkswagen is studying the possibility of giving independence to Porsche, one of its luxury brands along with Bentley, Bugatti and Lamborghini.
Porsche is currently 100%-owned by Volkswagen Group, which in turn is controlled by a financial holding company called Porsche SE.
Independence would take the form of an IPO of Porsche, the sports car brand whose emblematic model remains the Porsche 911.
Keep the popcorn handy.
