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Apple’s Failed Venture Into the EV Market Unveiled by Mark Gurman: More Than Just a Tesla Clone

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San Francisco Usa Oct 5 2015 Apple S 0

Appleโ€™s Misstep in the EV Industry

Apple, Inc.
AAPL made headlines recently due to the termination of its autonomous car project. Journalist Mark Gurman explored the reasons behind this decision in his latest โ€œPower Onโ€ newsletter.

Deviation from the Norm:
โ€œAppleโ€™s confidence in its ability to outdo Tesla and the entire automotive sector proved detrimental to the venture,โ€ Gurman revealed.

When Apple embarked on its car journey around a decade ago, the company debated developing a moderately innovative electric car with self-driving capabilities akin to Teslaโ€™s offerings, or a revolutionary autonomous vehicle designed to traverse destinations sans human intervention.

Opting for the latter turned out to be a setback, according to Gurman.

โ€œYears back, Apple believed it could solve a challenge โ€“ full autonomy โ€“ that still eludes the auto industry today, all while introducing a groundbreaking design. This task proved too arduous even for Apple,โ€ he explained.

Although creating a โ€œTesla cloneโ€ might not have been groundbreaking, such a vehicle could have showcased Appleโ€™s design prowess and seamlessly integrated into its product ecosystem, Gurman noted.

Major Challenges Faced by Apple

Gurman highlighted additional hurdles encountered by Apple in its self-driving car endeavor. The substantial costs associated with the project suggested a potentially high price point for consumers.

Furthermore, the company would have grappled with meager profit margins common in the auto sector, as Gurman pointed out.

โ€œThese obstacles were exacerbated by executive indecisiveness at Apple and the inherent complexities of manufacturing vehicles,โ€ Gurman added.

He emphasized the formidable nature of the auto market, contrasting it with the relatively less intricate landscapes of smartphones, computers, and MP3 players. The sector boasts numerous competitors, intricate supply chains, and necessitates significant capital investments.

โ€œVenturing into replicating a Tesla model, much less transforming the industry with an innovative product, was a risky gambit,โ€ Gurman emphasized.

Missed Opportunities and Potential Gains

Gurman suggested Apple could have pursued the Tesla clone route. By introducing a product to the market, selling hundreds of thousands of units, and leveraging the data accumulated to bolster a self-driving platform, success could have been within reach.

At a projected $100,000 price point per unit, Gurman envisioned a potential โ€œmultibillion-dollar moneymakerโ€ for Apple, even if these sales did not translate to substantial profits.

Apple concluded trading on Friday down by 0.60% at $179.66, based on Benzinga Pro data.

For more on Benzingaโ€™s Future Of Consumer Tech, click here.

Further Reading: Apple Sinks After Wall Street Titan Removes Magnificent 7 Stock From Conviction List

Image Source: Shutterstock

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