Apple Inc. (Nasdaq: AAPL) could finally give Tesla (Nasdaq: TSLA) a real fight in the electric vehicle game, according to Morgan Stanley analyst Adam Jonas, who focuses on the latter. The mobile phone giant is reportedly working on releasing its first car model.
“The message from Eric Woodring [Morgan Stanley analyst for Apple] and our Apple team is: Apple’s gonna do a car,” Jonas said in an interview. “And it’s gonna be a game-changer.”
Jonas highlighted key points that might indicate the capacity of Apple in venturing into self-driving electric vehicles.
“We spend collectively about 600 billion hours inside cars, Apple doesn’t really touch that,” Jonas said.
The analyst also looked into Apple’s balance sheet, highlighting that the tech firm earmarked US$507 billion for share buyback program. This is also immensely higher than what Tesla spent on research and development of around US$ 35 billion.
“Can you imagine if they use even a portion of that into another vertical…” Jonas said.
Apple releasing a car has been a constant rumor, stemming from as early as December 2020 when the tech firm was reportedly working on its self-driving cars and a breakthrough battery technology. Apple executives were said to have been in contact with several Korean battery and vehicle parts manufacturers.
From targeting 2024 to produce its first car, Tesla has decided in accelerating its development of a fully-self driving car in the next several years, and targeting 2025 to introduce the car to the public.
“Eric and the team believe that it’s straight to autonomy for Apple… It’s gonna take a while… but finally, Tesla’s gonna get some real competition,” Jonas added.
Earlier reports on Apple’s car model include Apple Watch software executive Kevin Lynch spearheading the development of the vehicle that will truly be self-driving. The company is reportedly completing the “core work” for its maiden vehicle model, and is looking to design an interior with a touchscreen infotainment system, lounge seating for passengers, and no pedals or steering wheel.
Apple last traded at $154.09 on the Nasdaq.
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