Apple’s path to the EV market must be through partnerships with automakers

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Last updated on December 8th, 2022 at 02:42 pm

Apple’s path to the EV market must be through partnerships with automakers

Over the past five days, Apple shares have risen in price by 2.5%, but this was enough to increase its capitalization more than the capitalization of the entire General Motors Corporation. The culprit was rumours about Apple’s intentions to introduce an electric car. But industry analysts believe it makes sense for the apple company to start entering the market through partnerships with other producers.

Apple EV market
Apple EV market

Experts have already expressed the opinion that the car manufacturing business as such is characterized by high capital investment and low-profit margins. If Apple has no problems with the first, then the industry’s financial model may well scare it away. Some analysts agreed that Apple may be more interested in services to promote content, programs and services to a potential audience of robotic cars – freeing a person from the need to drive a vehicle, you can offer him a whole range of digital entertainment, which will be able to make good money.

Wedbush Securities analysts are convinced that next year Apple will announce a strategic partnership with one of the major electric vehicle manufacturers. Tesla, Volkswagen and even the Chinese manufacturer NIO are mentioned as candidates for cooperation. According to the authors of the research note, the likelihood of such an option for Apple to enter the electric car market exceeds 70%, if we talk about the prospects for the next few years.

The “two-stage path” implies that after assessing its potential in the electric vehicle market, after 2025 Apple will be able to think about the release of its own vehicles, albeit through cooperation with a contract manufacturer. In the second half of the decade, it will become clear what opportunities the personal vehicle market offers to new players, and if it offers Apple sufficiently attractive financial prospects, the company may decide to take a fateful step for itself. In a similar way, according to representatives of Wedbush, the Chinese Internet giant Baidu is going, which so far limits its presence in the automotive segment to cooperation with specialized manufacturers.

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