Reports over the last couple weeks show growing evidence that Apple is gearing up to create an electric vehicle. Apple has already hired more than 60 former Tesla employees. Tesla Motors CEO Elon Musk says Apple has been offering his engineers a 60% salary increase and $250k signing bonuses.
Apple has also recruited Johann Jungwirth away from his position as head of Mercedes-Benz’s Silicon Valley R&D unit.
According to a new report from Tim Higgins of Bloomberg, the company’s car team is planning to launch the electric vehicle by 2020.
Higgins adds that the company has additionally hired former engineers of Panasonic Corporation, Johnson Controls Inc, LG Electronics Inc., A123 Systems and others.
The Bloomberg report speculates Apple is speedily designing an electric vehicle that can be marketed to the masses - a car with a range of over 200 miles on a single charge and a price tag of less than $40,000.
Barclays said in a research note that the electric car market is worth $16 billion a year, and will grow to $71 billion by 2021.
Apple has plenty of cash on hand after several consecutive quarters of very high profits. They would be wise in diversifying and investing in the future. While some analysts deride this strategy by pointing to low margins in electric vehicles, Apple's bigger play could be the use of connected cars as a platform, similar to the iPhone and the Appstore.
Though connected cars make up less than 10% of auto sales today, their share is expected to skyrocket to 80% by 2020.
A even larger opportunity exists with the advent of self-driving technology. Think about all the hours people spend driving their cars. What is that time worth? What else could people be doing with that time? The answers to these questions could be worth trillions of dollars.
With Google, Uber, and traditional car manufacturers working on autonomous driving vehicles, it could very well become a reality by as soon as 2020. Reuters says it has learned from industry sources that Apple’s secret project involves self-driving electric cars.
In 2021, will people be listening to Tesla's Slacker Radio, Google Play Music, or Apple's iTunes Radio?
