A leading car industry expert says Apple could take a “big bite” out of the industry by outspending everyone else to create an electric car.
Adam Jonas, who’s auto industry analyst at Morgan Stanley research is quoted in the LA times saying, “If the world’s most valuable company were to design and engineer a car, we are convinced it would be 100 per cent a battery electric propulsion system.”
The newspaper reports that the tech giant has created a team of employees to explore an Apple-branded electric car. While Apple has yet to comment, hints of its work surfaced in a lawsuit filed against Apple earlier this year by electric car battery maker A123 Systems.
The company, which makes batteries for BMW, Daimler and Tata, accused Apple of poaching its employees.
“Jonas noted that Apple generates billions of dollars in profits — $13 billion and $18 billion in its last two quarters, respectively — and has a lot of of cash available for investment in a capital-intensive project such as car design,” said the report.
Just one quarter’s worth of free cash flow at Apple, approximately $15 billion, is equal to nearly four months of the combined research and development spending of all of the world’s automakers, he said.
Any vehicle Apple designed would be electric because, Jonas said, that’s the long-term future of the industry as autonomous vehicles hit the roads, speeding a transition from individual car ownership to shared transportation, he said.
“A fully autonomous car is meant to be shared, not owned,” Jonas said. “A fully autonomous car — as in no steering wheel, no pedals — can work 24 hours a day.”