๐๐ Apple Car Coming Soon?
Happy Sunday everyone,
We hope you enjoyed our first Sunday edition of Hump Days last week. From now on, the Sunday newsletter will primarily be focused on technology and anything going on in the tech world from upcoming innovations to startups! We hope you enjoy!
Over the past two weeks, we saw:
Apple Sues โStealthโ Startup Over Chip Trade-Secrets Theft (Bloomberg)
Apple Hires 31-Year Ford Veteran to Ramp Up Electric-Car Work (Bloomberg)
Starbucks to Launch NFTs This Year, Offering Access to โUnique Experiences and Benefitsโ (Tech Crunch)
TikTok Introduces Its First Ad Product To Offer A Revenue Share With Creators (Tech Crunch)
The Mysterious Apple Car... When Will It Finally Come?
This week, Apple hired 31-year Ford veteran Desi Ujkashevic for its electric car project, which has become an open secret at this point.
While this is a great addition to the Apple Car project, codenamed โTitanโ, Apple has had a difficult time keeping top managers and talent for the project. This is likely due to Appleโs struggle to settle on a vision for the car, which has been in the works since 2015.
In 2015, reports began coming out that Apple was hiring new employees for a mystery electric car project. Later in 2015, the WSJ reported that Apple was targeting a delivery date for 2019.
Rumors continued to swirl as to whether or not Apple was serious about developing the car, with Elon Musk in 2016, stating that Apple would probably make a compelling electric car.
โItโs pretty hard to hide something if you hire over a thousand engineers to do itโ - Elon Musk
In September 2018, Apple reportedly had the third most autonomous vehicle permits in California with 70, behind GM's Cruise and Alphabet's Waymo.
Finally, in June 2019, the first solid piece of news started to come out about Appleโs โTitanโ project. Apple decided to purchase Drive.ai, a self-driving startup founded by Stanford researchers that was slated to shut down just days before the acquisition.
Then once again, outside of the occasional rumor, there was silenceโฆ
In late 2021, reports came out from Asian media networks that Apple was visiting Asian suppliers and carmakers including SK Group, LG Electronics, Samsung, and Toyota.
So far, the reports are that Apple is expected to complete the selection of suppliers for its electric vehicle by the end of 2022. Then in the next two to three years, it is expected that Apple will begin full-scale development, a public announcement, and mass production.
That being said, rumored timelines up to this point for the Apple Car havenโt been exactly accurate.
So what would the release of the Apple Car do to Appleโs stock price?
Well, to start off, an Apple Car gives Apple a ticket into a market significantly larger than the smartphone market.
According to Dan Ives, an analyst with Wedbush, Apple is targeting a 5%-7% market share in the EV market.
โIf Apple launches an electric car by 2024, the product could generate $10 billion in revenue by year threeโ - Dan Ives
Some estimates have even put global electric vehicle sales at $1 trillion by 2027, which would bode very well for the Apple Car.
What will likely prove to be difficult for Apple will be the brutal auto supply chain. The capital required to build out the Apple car will likely cost tens of billions of dollars and it will also need to find many suppliers to work with.
The car industry typically has lower gross margins that Appleโs current business segments, leading Goldman Sachs to believe that โthe release of a production Apple Car is likely to have only a minor impact on Apple's bottom lineโ.
On the other hand, J.P. Morgan believes that Apple will as disruptive in the car business as it was in the phone business years ago.
Whatever may happen, Apple is one of the most recognizable brands in the world and it is likely that many will enthusiastically purchase an Apple car for the โbrandingโ alone.
Chart of the Week
So far this quarter, overall funding sizes for venture capital and private equity have materially decreased since last year.
This can likely be attributed to increased cost of capital and a valuation re-rating in the public markets also affecting private markets.
Startup News
Teensโ Indian Instant Grocery Startup Reaches $900m Valuation (Bloomberg)
New Startup Airline Launching $129 One-Way Flights To Europe (Business Insider)
3D Printed Plant-Based Meat? Meet Mooji Meats. (Tech Crunch)