Why does Apple want to make a car? Well, Loup Ventures estimates the global market for new vehicles, including cars, light trucks, commercial vehicles, and semis, is about $2.8T.
Electric vehicles (EVs) currently account for 3% of global new vehicle sales, according to Loup Ventures. The firm believes that over the next decade that number will reach 50% plus, representing “outsized opportunities” for EV-first automakers which may include Apple.
We looked at the size of the smartphone market to put the transportation opportunity into perspective. Using 1.4B annual unit sales with an ASP of $310, we estimate the global smartphone market is about $450B. That’s the size of the current market.
What could the market become? There are approximately 3.5B smartphone users globally, implying a 45% penetration rate. We believe eventually 75% of the world’s population, or 5.7B people, will be smartphone users. Assuming an average 1.2 phones per user, with an average life cycle of 3 years per phone, this implies about 2.3B annual unit sales. At an ASP of $325, this implies a $750B market.
While the smartphone market is large, it’s dwarfed by the transportation opportunity. We believe the size of the transportation market is one reason why Apple appears increasingly serious about making a car.
MacDailyNews Take: If and when Apple enters the transportation market, they will inevitably rise to the top in revenue share.