People don’t understand what companies like Apple, Google, Amazon or even Baidu are capable of at the intersection of EV and autonomous vehicles. I guess they will find out.
The Tesla bubble will burst on many sides, not just China.
This week it came out that Apple is close to finalizing a deal with Hyundai-Kia to manufacture an Apple-branded autonomous electric vehicle at the Kia assembly plant in West Point. Apple starting to make its smart car in 2025 is realistic. Time flies and Tesla’s stock might not.
According to one source familiar with Hyundai-Kia strategy, “Chung has made it clear, mobility is the future of the company.” That’s important because the Apple Car will be fully autonomous. Now you can only imagine what Google will do with Waymo and Baidu will do with Apollo.
While margins are thin, the smart car is prime real estate for the software of everything companies like Apple, Google and Baidu command. Amazon can readily keep acquiring companies like Rivian or Aurora to bolster their option as well. How does a Tesla or an EV startup compete with that? How do legacy car makers for that matter?
So many investors are really clueless about how the future of the car is the future of the EV smart car. That means software. Tesla as a non-LiDAR company may have a very hard time with fully autonomous vehicles, as they’ve already broken many promises in terms of product timelines.
Sources familiar with Apple’s interest in working with Hyundai say the tech giant wants to build the “Apple Car” in North America with an established automaker willing to allow Apple to control the software and hardware that will go into the vehicle.
After years of speculation that it will eventually get into the auto business with its own vehicle, Apple is close to finalizing a deal with Hyundai-Kia. Apple will be the first 3 trillion dollar company and the rise of its smart car will be a major part of that in the 2020s.
While GM, Ford and other legacy auto companies try to pivot, BigTech will pivot faster and better. Apple and Google will just be two of the examples, but actually Amazon and Baidu may be able to do it even better, which will shock many analysts. This is because of their Cloud advantage and superiority in smart speaker technology. It’s counter intuitive, but software integrations will be the major differentiator. Siri isn’t exactly what she used to be.
Conjecture around Apple’s secretive project to design and sell its own car re-emerged in December after a hiatus of several years, with Kia’s part-owner Hyundai Motor Co. mentioned as a potential partner. Koreans are really good at what they do and Apple will want it done in North America.
The key question is how serious Apple is about taking on Tesla Inc. and other electric-vehicle makers, and whether it has determined it will need an established manufacturer to be able to roll out its own product. We can assume that Tesla won’t have a huge portion of the market. With so much competition from so many sides the bear case of its stock valuation is highly likely in about 2023 when this all becomes more apparent. It won’t win in either Europe or China, which is really what matters most.
Elon Musk is full of bravado, but SpaceX will end up being a superior company to Tesla and he’s known that for years, despite the weird hype about Tesla in 2020.
At the Last Futurist, we’ve written a lot about the Tesla and EV bubble, but it’s not until BigTech gets serious about disrupting the industry that we see exactly how it plays out. Apple, Baidu, Google and Amazon will all make significant contributions to the future of the smart car and history may actually just have an asterisk about Tesla in the footnotes of the history of innovation. Check back in ten years, if you don’t believe me.