- Apple Car rumors have been flying fast and furious over the past few months.
- The latest is that Apple might join with Hyundai-Kia to build “Project Titan.”
- Don’t buy it — Apple doesn’t have the entrepreneurial risk addiction that a car would demand.
- Visit the Business section of Insider for more stories.
Creating a brand in the auto industry isn’t complicated. First, you build a car. Then, you sell the car. Then you build and sell some more cars. If you’re lucky, the car is the Model T and a hundred years later, you’re the Ford Motor Company.
There really isn’t that much to think about here. Tesla, the first successful new American automaker to come along since Walter Chrysler had a twinkle in his eye in 1925, is a shining example of how you do it. The risks are obviously immense. But the rewards are, too. Tesla is now the most valuable automaker in the world, worth more than the globe’s top nine car companies, combined.
The credit for this monumental achievement goes to CEO Elon Musk, love him or hate him. A controversial guy, to be sure. But cut from the same cloth as all the other bold automotive entrepreneurs, from Henry Ford to Enzo Ferrari to John DeLorean.
If Musk isn’t your thing, you can always look to his less loony contemporary, Henrik Fisker, whose Tesla-rivaling Fisker Automotive actually beat Tesla to market back in the early 2010s, but later failed in the wake of the financial crisis. Fisker is back with a new company, Fisker Inc., a new car, the Ocean SUV, and a new business model that doesn’t require a factory. Rather, Fisker’s “asset-light” model has the Ocean being built by Magna Steyr, the world’s preeminent contract manufacturer of vehicles. It arrives in late 2022.
Read more: The inside story of how Henrik Fisker pulled off a $3 billion deal to fuel his electric car comeback
What Musk and Fisker are, Apple’s Tim Cook is not. Cook is an exceptional CEO, precisely the successor to Steve Jobs that the company needed. But Cook isn’t an entrepreneur. He’s a brilliant process leader who has made not screwing up the colossus of Cupertino his life’s mission, raising it to the level of art. Apple is, as far as I’m concerned, the best-run company on the planet. That’s not something Jobs could have accomplished, or even wanted to.
So how does the Apple Car, the firm’s currently most avidly hyped non-product, factor into this?
The lastest: Apple could partner with Hyundai-Kia
It doesn’t. Consider what we sorta-kinda know. “Project Titan,” as it has been dubbed, has for half a decade been the largest nothing burger in the auto industry: all speculation and no spy shots, except for a few janky minivans spotted in the Bay Area, sporting self-driving sensor roof-racks. But with Tesla riding a stock-market rally for the ages, and with a welter of new auto startups entering the fray — heck, even woeful Faraday Future has staged a revival — Project Titan is a story again.
Read more: The ‘Apple Car’ would wreck Apple, and Tesla’s incredibly volatile history shows why
The latest is that Apple is reportedly deep in talks with Hyundai to partner on an Apple-branded electric and self-driving vehicle that could be designed in California but bolted together in the US South. Although Apple might not really be in substantive talks with Hyundai-Kia. It all depends on which unnamed, close-to-the-deal blabbermouth you trust.
Apple’s maybe-mobile might be manufactured at a Kia plant in Georgia that currently doesn’t build any electric vehicles, although according to Kia it is running flat-out to keep up with demand for the Telluride SUV, one of the automaker’s most popular vehicles, ever. The way this alleged discussion has been shaping up reminds me of that time Chrysler and Maserati got together to produce a LeBaron with an Italian accent, which did about as well as you’d expect such a concoction to do. (And I say this as a longtime LeBaron fan and a person who wouldn’t mind owning a Maserati.)
Another possibility, according to Morgan Stanley, is that Apple could basically pay for a Kia factory in Asia. “Apple and Kia may be reaching an agreement where Apple will invest … $3.6 billion into Kia Motors in order to set up a production facility for future car development,” the investment bank’s analysts wrote in a research note published last week. That’s right: Apple could spend almost $4 billion of its own dollars to turn Kia into a Pacific Rim EV juggernaut. Apple has almost $200 billion in the bank and can afford to waste money, but such a move would be even more baffling than the rumored Georgia setup.
The semi-permanent limbo that Project Titan inhabits contrasts vividly with Tesla’s actual results: 500,000 vehicles delivered in 2020, its first full-year profit, and a staggering amount of momentum heading into 2021.
Apple is way, way, way behind
Project Titan, meanwhile, still hasn’t made a significant leadership hire from the car business — unlike Alphabet’s Waymo, helmed by the highly regarded John Krafcik since 2015 — but it has brought on perfectly capable, below-the-line engineers from carmakers such as Porsche, presumably to work on chassis design. A curious move if your chassis is going to come from Hyundai-Kia and your master plan basically entails a bitten-apple hood ornament.
The volume of jabber around Project Titan for the past few months has been hard to avoid, amplified by a lot of jabber around EVs and autonomous vehicles generally. Apple is up to something, although I think Cook is really just trying to get some level of value attributed to a mobility undertaking or perhaps testing the consumer market to discern whether Apple might want to incinerate some considerable portion of its cash hoard on a money-torching automotive venture.
Meanwhile, the actual entrepreneurs aren’t fiddling — they’re charging ahead. Musk has a nearly two-decade head start on Apple, Waymo is a decade old, and even later entrants are well out to sea while Apple isn’t even in port. The good ship Titan isn’t even yet in drydock. It exists on an eternal drawing board.
The dreaded word: “partnership”
Apple is, at base, a design company, so this makes sense. But Apple is also a company whose strength is scalable simplicity. Anytime one picks up ornate chatter and intricate fantasy emanating from Cupertino, suspicion and skepticism are the justified responses. And an important tell: for all we’ve heard about the all-electric, self-driving Apple Car, we’ve heard literally nothing about how easy the machine would be to interact with.
Instead, we’re hearing the dreaded word “partnership.” So if there’s anything to that, rest assured that Project Titan would, if it ever hits an actual road, would be a branded undertaking with Apple attempting to extract a 30% profit from a collaborator in a business that struggles most years to manage 10%. That would be a partnership that won’t last long. (By the way, Tesla is among the most successful, sharing-averse carmakers in the world and it has been able to swing only a 20%-ish gross margin.)
Consider, then, this simple rule: When it comes to cars, follow the entrepreneurs. They’re the only ones crazy enough to commit to this crazy business. Musk, like Ferrari before him, couldn’t care less about money. The mission is what matters. For Ferrari, winning races and incidentally selling a few gorgeous road cars along the way. For Musk, ending the era of fossil fuels.
This is simply not who Tim Cook is. I question whether anyone at Apple is this person. So don’t buy the hype: unless the situation at Project Titan changes drastically, there will never be an Apple Car.
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