Mark Rechtin
Reference Mark
T
he automotive industry pundits. Analysts. Tech
bloggers. Fellow car journalists. They chided, they
derided, they scolded. How could MotorTrend have
gotten it so wrong? The idea that Apple would
outsource the manufacturing of a self-driving
electric vehicle, rather than build a proper car for actual
drivers? What daftness.
This magazine’s June 2016 cover story, “Hello. Are
You the Apple Car?” blew up the internet. In our report,
we talked about an “inside-out” car with a focus on
convenience rather than dynamics. In other words, the
exact model every other automaker is now pursuing in
developing their autonomous creations.
We also forecast, “Apple will probably contract it out,
outsourcing the manufacturing intricacies overseas and
avoiding U.S. taxes that could take upward of a 40 percent
bite from its overseas war chest.”
Now this magazine’s prediction of an electric, mostly
autonomous, outsourced vehicle seems remarkably
prescient. According to recent South Korean media
reports, the maker of iPhones and MacBooks appears
ready to unite with automaking giant Hyundai Motor in
a joint venture to build an autonomous vehicle, equipped
with some version of Apple’s iOS in automotive form,
starting in 2024.
Apple has quietly operated an automotive skunkworks—
ironically named Project Titan—since 2014. And folks
have gotten revved up about the idea of an iCar ever since.
But notoriously secretive Apple has never commented
on the group or its work, barely even acknowledging its
existence in back-channel conversations.
Here’s the thing: Apple was never going to build its
own car. It saw the mess of “manufacturing hell” Elon
Musk encountered in creating Tesla, not to mention
the ridiculous scale of capital and manpower necessary
to undertake the ambition of being a global
automaker. Apple had a market cap of $2.
trillion at press time, but allocating $5 billion
to $10 billion to become a viable car-making
entity is still something that might attract
a few inquisitive memos from the finance
department. So it’s taking a lower-risk, higher-
return direction of developing the innards
that makes the machine go.
Want proof? Go to Apple’s careers page and search for
“automotive.” You’ll get a few dozen results, most of which
are along the lines of “software engineer.” Now do the
same thing for EV startups like Rivian. Or Lucid. They’re
searching for hundreds and hundreds of folks, mostly in
the engineering of the chassis, batteries, vehicle dynamics,
and vehicle body. Oh, and manufacturing.
If Apple was going to directly engage in vehicle
production, there’s no way such an enterprise would still
be a secret, because the human resources headhunters
would be hiring like crazy for a 2024 launch. What’s
more, the Silicon Valley rumor mill told of hundreds ofAn Apple Car with a Hyundai Badge? Yep.
layoffs from Project Titan (and its even more secret market
research arm, SixtyEight Research) in the not-so-distant
past. Then, in 2019, Jony Ive, Apple’s design whisperer and
resident chief car nerd, departed Apple to hang his own
shingle. Tea leaves, folks.
So what is Apple doing? Becoming a next-gen Tier 1
supplier. It’s going to create the electronic guts of the
machine—the automotive equivalent of “Intel Inside,”
which made that software company hugely rich. Apple
may be playing four-dimensional
chess here, envisioning the vehicle-to-
vehicle autonomous communication
architecture of 2030 and beyond.
Although early reports spoke of
manufacturing the car in America, Apple
may not care about engaging with fully
developed, narrow-margin auto markets
like the U.S. (get over it, exceptionalists).
The company might instead look to Asia, specifically China,
where the rapidly rising middle class wants automobiles
but may not care to learn how to drive them. Rather
than engage with China’s nascent auto industry, Apple
chooses Hyundai—a proven automaker with high-quality
componentry, and which has better entrée into China than
the big Japanese OEMs.
A Hyundai spokesman confirmed reports of talks
between the two companies but mentioned Apple is
negotiating with several OEMs. Heck, Apple doesn’t have to
pick just one automaker. It could pick several. But will any
of the resulting products wear an Apple badge? Doubtful. Q@markrechtin
NEWS I OPINION I GOSSIP I STUFFMotorTrend was
way ahead of
the curve when it
imagined what a
car developed by
Apple might look
like. Still more
prescient was
our prediction
that Apple
would outsource
manufacturing.8 MOTORTREND.COM APRIL 2021