Changing lanes

Apple making moves toward an electrifying auto gambit

You heard the news last month—Apple is building an electric car—and yes, it looks serious.

This bid for a tentpole in the electric car biz shows how a powerful incumbent can marshall its resources and imagination to mount a competition in a sphere completely outside its normal realm. With our chops in fossil fuels, seismic computing and advanced visualization, we in Oklahoma could learn a thing or two from Apple’s bold crossover move.

Like his predecessor Steve Jobs, Apple CEO Tim Cook is both a big-picture thinker and an unapologetic environmentalist. Perhaps the most aggressively pro-environment corporate chief in modern history, Cook has been known to tell off shareholders who don’t support Apple’s prioritizing of social responsibility over return on investment.¹

Under Cook, Apple’s short-term plans include the purchase and/or coproduction of nearly $900 million in clean energy for critical domestic assembly and production functions. The company has also reduced the power consumption of all its products. Some analysts link this ethos directly to the world’s most valuable company’s interest in the automotive industry. A breakaway Apple electric vehicle might spark a drastic consumer switchover that would finally deliver a markedly cleaner global automotive fleet. It’s an essential turnover that GM, Tesla, Toyota and others haven’t accomplished. 

Under Steve Zedaskey—formerly of Ford Motors—Cook has assigned perhaps as many as 1,000 Apple employees to a secret development location. According to the Wall Street Journal, CNET and others, the effort appears to be geared toward an electric vehicle with autonomous capabilities. This would align with the self-driving prototypes from Google, electric car maker Tesla and a handful of others.

Global efforts to mitigate climate change are accelerating but still slow. Only drastic change will begin to stem the violent storms, massive coastal flooding and catastrophic food and agricultural crises we’re staring down. The new power plant and industrial unit carbon rules for U.S. operators are part of the picture, as was December’s U.S./China climate accord struck by President Barack Obama and China’s Hu Jintao. But more dynamic—even magical—solutions are required, and soon. 

Apple’s strategy would combine an extremely attractive electric vehicle line with its obsessive, intensely loyal fan cadre. This cocktail could drastically quicken the pace of electric car adoption internationally, including in China, where Apple’s new iPhone 6 line has been incredibly well received. It would also legitimize Tesla, increase demand for electric cars and push conventional brands further into the ring. 

The ride-sharing landscape dominated by companies like Uber and Lyft is another facet of the Apple car project. Some transportation analysts anticipate a sharp drop in car ownership, particularly in dense urban areas, as semi-automated or fully self-driving, shared vehicles become central to urban transit in America.

By almost all accounts, Apple’s project would take three to five years. That’s edging right up against the expected 2018 launch of highly affordable electric options from Tesla, Toyota and GM. Is Apple really interested in competing with Tesla’s Elon Musk—arguably the most talented and imaginative business person on the planet? Why did Musk apparently rebuff an Apple acquisition pass last year? It might have been one of the hottest combos in recent tech history. Tesla hasn’t yet pushed the U.S. or world automotive marketplace into the electric vehicle column. The company has produced and sold but a tiny fraction of the total annual automotive output. But Musk is still an agile player in the movement with holdings in space commercialization and a utility-scale solar power production company.

Key queries

Is the most valuable company on the planet really interested in what some see as a low-margin, highly regulated, rarely inventive realm?

Tesla has shown that with a few billion dollars, it’s possible to create a new car company from scratch. Sitting on $178 billion, Apple is extremely well positioned to build on its continued success and do just that. According to Yahoo Finance, Apple’s worth exceeds that of almost every current car company combined—including BMW, Daimler, Ford, GM, Honda, Fiat, Chrysler, Toyota, Tesla and Volkswagen. With more than 60 percent of Apple’s revenues tied to the iPhone, the company is looking to cast a wider net and make broader use of its wealth of finely-tuned resources. 

Can Apple navigate the regulatory and safety gauntlet of automotive production? How will Tesla and other electric-invested outlets respond? Some analysts predict that Apple will do for the electric car what it did for the smart phone—a once-geeky device that caught fire because of Apple’s iphone touch interface, built-in web capacity and superior branding and marketing.

Think about it—a potential climate game-changer and the coolest wheels ever... 

Disclosure: Pearcey has done consulting and testing work for several tech/computing firms, including work connected to Apple Inc. and its partners.

1) The Mac Observer: “Tim Cook Soundly Rejects Politics of the NCPPR, Suggests Group Sell Apple’s Stock” 

For more from Ray, check out his feature with Molly Bullock on incoming Tulsa Public Schools Superintendent Deborah Gist.