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Is the Apple Car Finally Ready for Prime Time?

The consumer tech giant has the cash and capital to fund a big bet on EV market disruption

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John Engle
Sep 26, 2021


  • The company has been working on the Apple Car for years; it launched Project Titan, a secretive EV project in 2014.
  • While Project Titan struggled in its early years, it has since regained its feet.
  • Bernstein has long touted the potential of the Apple Car to disrupt the EV market; their wish may soon be granted.
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Apple Inc. (

AAPL, Financial) has spent years teasing investors with the prospect of a serious push into making cars, only to throw cold water on the notion time and time again. Even so, the idea that the company behind the iPhone (which essentially remade the smartphone market) and the iPad (which birthed a whole new sub-segment of the consumer electronics market by little more than force of will) has continued to titillate tech investors of all stripes.

Now at last, after uncounted false starts, Apple may finally be ready to make its mark on the automotive industry. Unsurprisingly, this has attracted unprecedented levels of analyst and industry attention.

But can Apple really disrupt a sector so far removed from its consumer tech roots? The answer to that question could have profound ramifications for the future of the $2 trillion automotive market.

A long time coming

While Apple co-founder and long-time CEO Steve Jobs had reportedly dabbled with the idea of developing an “iCar” as early as 2008, it was not until 2014 that the company made its dalliance with cars official. That year, Apple launched a secretive exploratory program dubbed Project Titan.

In its initial form, Project Titan was as ambitious as it was clandestine, drawing a team of approximately 1,000 people to its undisclosed base. The original development team included dozens of seasoned automotive analysts, engineers and executives. Apple was clearly willing to spend a lot in order to establish a foothold in the savagely competitive and highly capital-intensive automotive industry.

Despite its promising start, Project Titan quickly came to realize that any progress would have to come at a much slower pace than Apple had initially anticipated. Within just a few years, Apple’s top brass had become somewhat disillusioned with Project Titan––and with the putative Apple Car that the initiative had been founded to develop. By October 2016, Apple seemed to be getting ready to throw in the proverbial towel, as Bloomberg reported at the time:

“Apple Inc. has drastically scaled back its automotive ambitions, leading to hundreds of job cuts and a new direction that, for now, no longer includes building its own car, according to people familiar with the project. Hundreds of members of the car team, which comprises about 1,000 people, have been reassigned, let go, or have left of their own volition in recent months, the people said, asking not to be identified because the moves aren’t public... Apple executives have given the car team a deadline of late next year to prove the feasibility of the self-driving system and decide on a final direction, two of the people said. Apple spokesman Tom Neumayr declined to comment. The new shift and deadline come after months of strategy disagreements, leadership flux and supply chain challenges.”

Instead of folding its tent, Apple opted to use the 2016 shakeup of Project Titan’s organization to narrow the scope of its automotive ambitions, shifting much of its focus and attention to developing autonomous vehicle technology that would not limit the company to a single vehicle platform.

Preparing for EV disruption

While it faced unexpected challenges, Apple never truly gave up on the idea of the Apple Car as a unique product that could genuinely disrupt not just the nascent electric vehicle market, but the entire automotive market. After years of toil, often in the shadow of Apple’s other soaring business ventures, recent signs and portents have led some industry watchers to the belief that the time of the Apple Car may be near at hand.

For years, Bernstein’s Electric Vehicles team has endeavored to draw investors’ attention to the possibilities that an Apple Car could represent. Bernstein’s analysts continue to be the Apple Car’s most ardent evangelists on Wall Street. On Aug. 31, they sent out their latest investor note addressing Apple’s EV ambitions, signaling that the tech titan is at the cusp of making the Apple Car a reality:

“Given its revenue base, few addressable markets are sizeable enough to impact Apple’s financials, but the auto sector offers a uniquely large, addressable consumer market...A successful EV launch from Apple would add a formidable, well-capitalized competitor to the automotive industry.”

For all their long-standing optimism, Bernstein analysts are somewhat sanguine about the timescale needed for Apple to bring its own EV offering to market at scale. The analysts’ estimate is that 2025 is the earliest that the Apple Car could realistically be brought to market. However, once the Apple Car does arrive in force, the analysts foresee an exponential ascent. Indeed, they went as far as to suggest that Apple could achieve annual sales of 1.5 million Apple Cars by 2030, which would translate to revenue of $75 billion per year.

My take

Ultimately, the plant, equipment and personnel required to manufacture, sell and service millions of vehicles per year does not come cheap. Based on the experiences of other EV startups in recent years, the cost of reaching sales of 1.5 million vehicles per year would almost certainly surpass the $10 billion mark. However, while that might be too rich a price tag for most would-be auto market disruptors, it is barely a drop in the bucket for Apple, which came into 2021 with nearly $200 billion in cash on hand. In other words, Apple can pretty much afford to spend whatever it takes to reach its desired scale.

There is little question of whether Apple can establish a viable EV business. However, there is some cause for asking why the company would want to do it in the first place. After all, Apple’s vast cash reserve has come as the result of its leaning into high-margin, high-turnover consumer electronics. The automotive business, meanwhile, is far more competitive and offers much stingier margins even under ideal conditions.

It remains to be seen whether Apple will truly gamble on the EV market. I will certainly be watching this story closely as it develops.

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I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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