According to a report from Reuters, Apple (Nasdaq: AAPL) has been working on an electric car for the last few years and is targeting a 2024 release date. The car is also expected to work autonomously as well as integrate its breakthrough battery technology.
Internally, this secretive project was dubbed as Project Titan. There have been several rumors about it based on the company's hiring decisions, however this is the most credible sign that it's progressing into something tangible. Earlier, there were reports that the project had been scrapped in favor of an effort to create a software OS for cars.
However, this latest reporting seems to confirm that the company is looking to launch an autonomous, electric vehicle for consumers which differs from other companies like Google's (Nasdaq: GOOG) Waymo or Amazon's (Nasdaq: AMZN) Zoox which seem to be building robotaxis.
Maybe the most interesting insight is that Apple seems to be working on a new battery design that is revolutionary in terms of lower costs and more effectiveness. One beneficiary of the news could be Magna International (NYSE: MGA) as Apple would be looking for a third-party to actually manufacture its cars. And, Magna is the most likely choice.
This fits with Apple's strategy over the past decades as it focuses on the design and tech while letting third-parties handle the actual manufacturing. However, as Tesla (NASDAQ: TSLA) has shown, producing an electric car at scale is a difficult task while maintaining quality.
Of course, Apple is the world's most valuable company with a $2.2 trillion market cap and able to borrow money at a cheaper rate than the U.S. Treasury. In recent years, Apple's products have been more modest such as the Apple watch, Airpods, or software bundles. This would be its first big swing since the iPhone.
Since becoming CEO, Tim Cook has been pretty cautious. But, this would be the first major undertaking of his tenure. Interestingly, Tesla CEO Elon Musk tweeted that he had approached Apple about a merger or partnership when Tesla was struggling a few years ago and that he was rebuffed. Tesla shares finished 6.5% lower following the news, while Apple gained 1.2%.
Unlike Teslas, Apple's cars will integrate LIDAR sensors for its autonomous systems. Most believe that the company will look to build these internally if it does go ahead with making cars.
Overall, Apple's plan is a sign that the EV market's growth is only beginning. Recently, Japan announced that it wants to phase out all gas-powered cars by the middle of the next decade. Apple is looking to capture some of its growth. Project Titan is the most obvious way but it could also do so other ways through its battery technology, and autonomous driving software.