One of the biggest rumors in business is Apple’s desire to get into the car market. And the latest rumblings seem to confirm it, or at least that the company is taking a look at options.
Apple has assigned as many as 200 people to what it’s calling Project Titan, according to Bloomberg. Among them, some fresh hires from the auto industry.
Heading up the team is an Apple vet with a history of success. The Wall Street Journal reports, Steve Zadesky has been given the reigns. He was the leader overseeing the creation of both the iPod and iPhone.
Zadesky has some experience in the auto industry, he was an engineer at Ford from 1996-1999. He’s reportedly been given permission to hire more than 1,000 employees from inside and outside the company. Work developing the electric vehicle is said to be going on at the company’s headquarters in Cupertino, California.
So far there’s no word yet on what Apple is exactly working on; if the company is going ground up and building a new vehicle from scratch, or will it pair with a carmaker on a joint effort.
If Apple decides to go ground up, it's got the cash to do so with nearly $180 billion on hand, much more than any current car maker. And it will be entering an already crowded field, vying for market share with Tesla, General Motors, Toyota and others. All of these companies have a leg up in development, and with that advantage, still stumble in areas like safety issues and parts defects. The government has been cracking down on automakers more than ever over safety issues. There were 220 recalls in 2014 affecting more than 64 million vehicles, according to Edmunds.com.
Another factor, how much can Apple actually make with an electric car? Profit margins on current vehicles are already low, something Apple investors aren’t used to.
There's also the question if EVs are really the future. States like California are giving larger rebates for vehicles powered by hydrogen fuel cells. They top most electric cars in recharge time and distance per charge.
One thing is for sure, Apple will be watching closely what Tesla is doing, what it’s done right and wrong. The company is considered on the cutting edge of EV technology. Its latest earning numbers show it sold 30,000 cars last year, but made no profit. It did however show a gross margin of 28% indicating there are profits to be had in the future. Something Apple may be looking to bank on.
