The market was stunned a couple of weeks ago by a Reuters report that Apple (AAPL  ) had been working on producing its own line of electric vehicles. It would mark Apple's first new major product and risk since CEO Tim Cook took over the company following founder and former CEO Steve Jobs' passing.

Cook's tenure is a success by many measures including revenue growth and margins. However, his primary focus has been on improving operations and improving positioning in its markets. There have been some new products such as the iWatch and Airpods. Additionally, the company has introduced new offerings like Apple TV, Apple Fitness, and even enterprise offerings.

Since Apple is so massive, none of these individually are enough to alter the company's trajectory, however, for most companies, they would be a much more notable achievement.

Apple Car Deal

An Apple car has been rumored for many years now. However, the most recent update seemed to involve the company scaling back its ambitions to focus on an OS for cars that it could license to car companies rather than its own cars. This seemed to fit the same pattern as the Apple TV which was initially believed to be an actual TV screen, but Apple TV eventually came out and was more of a set-top streaming box rather than an actual screen.

However, it's clear that Apple is willing to take a big swing on this project and is looking to begin production in 2024 with a self-driving electric car to follow in 2027. Similar to how it handles the design while outsourcing production for its phones, it's looking to partner with Hyundai (HYMTF  ) to handle production. This is smart for Apple as Hyundai has production facilities all over the world and can help Apple keep its costs down.

The initial phase is to produce 100,000 cars in 2024 at Kia Motors' facility in Georgia. Early indications are that Apple is planning to integrate its "breakthrough" battery technology in cars that it believes will differentiate its offering.

Stock Price Outlook

Both stocks were higher following the news. Hyundai's stock gained 75% in the next couple of trading sessions. Apple's stock has underperformed the broader market but is outperforming its tech peers. The company tested its previous all-time highs in mid-December, but the stock has trended sideways so far in 2021.

Apple is setting up nicely in many ways. It's almost a value stock given that it has a forward p/e of 29 which is cheaper than the S&P 500 Index (SPY  ). However, the company has better growth prospects especially with strong iPhone 12 sales. Additionally, the EV introduction gives it even more upside. Given Apple's success in creating mass-market products with good design and performance, there's no reason to think that it can't be successful. Additionally, Apple has the resources to endure losses in order to win market share.