Why does Apple want to make a car?

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.

vehicle under wraps

Gene Munster and David Stokman for Loup Ventures:

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.

34 Comments

      1. Ah, someone who understands fuel, and how we get it for vehicles. Nice!

        Wind and solar are prohibitively expensive and can only be supplemental fuels. Store it in batteries? Okay, I’ll not even try to explain how costly wind and solar are, let alone storing in en mass in systems that don’t exist yet, and how expensive and inefficient they would be and what energy costs would be if such tech ever came around. Science fiction is cool, but I’m staying planted in reality of the next few decades…

        The planet has natural gas coming out of its ears, and the US is loaded, absolutely loaded with it. 500 – 1k years at least…

        Every home can come with or add a natural gas to hydrogen kit and everyone can fuel their cars at home in minutes on the cheap! Reliable, stable cost, abundant energy/fuel.

        The only fear battling against natural gas is the methane leak game, which is neither a factual science as the EPA has done a crap job measuring any leak %, and measuring the atmosphere is stupid because methane comes from so many natural things, such as decomposing Forrest’s to swamp land in magnitudes.

        Natural gas is a great way to make hydrogen, and in turn, use it for EV powered vehicles, with drops of water out the tail pipe being the “exhaust.”

        Toyota and Hyundai get it and are pouring in tens of billions into the technology. In a decade it will really begin to emerge, and the public needs to be properly educated on its merits… which in this world, stuck on the idea that boys can now be girls and destroy female sports for good – I’m doubtful we can teach anything anymore…

          1. You can live without heat and power like the 5 million people of Texas and the Southwest who are dying of exposure. You can try to heat your home with the frozen windmill and the snow covered solar panels that replaced the perfectly working but now decommissioned natural gas and coal power plants that Texas shut down to satisfy the green fools who don’t like the resources God gave to man to use for our good.

            1. Kent, I am posting during one of the intervals that I have electricity between rolling blackouts. The truth is that the issues here have very little to do with renewable sources, which have been affected less than natural gas and much less than coal. Some wind turbines iced up but most are working just fine.

              Late winter is normally a low-consumption time here, so a number of plants were closed for maintenance before the air conditioning season. A lot of gas wells froze. Pressure in the lines fell due to home heating demand. Outdoor stockpiles of coal are covered in ice. The cooling water for some plants is also frozen. Demand for electrical heat is greater than the supply from unaffected sources.

              Underlying all this was a deliberate decision in Texas to avoid building excess capacity and accept the risk of events like this.

            2. Texas’ “deliberate decision” to avoid building excess capacity is because operators couldn’t see a return on investment due to be undercut by wind and solar which is cheap for two reasons – it’s subsidized and it doesn’t have to pay for the costs of grid reliability by purchasing battery farms or contracting with gas peaker plants to produce power when needed, not when they can.

            3. The gamble to avoid excess capacity paid off for the Texas utility companies. All of them are trading significantly higher because they control what has become a scarce resource. A quantity of electricity that they normally sell (at a profit) for $350 has been selling for the better part of a high-demand week for $9000. That will be reflected next month as a 25X increase in the fuel cost adjustment on consumers’ home electric bills. Since consumption has also been outlandishly high thanks to sustained cold weather not seen since 1949, there will be plenty of $1000+ electric bills.

              There are reports from Austin of infuriated citizens harassing utility workers because their power has been off in a high-tech city in a First World country for 60 hours during single-digit temperatures. Wait until those of us with intermittent power get our next bills. The Legislature is in session, so some of those bills are going to people who can do something about it.

            4. TxUser wrote “The truth is that the issues here have very little to do with renewable sources…”

              This is a lie. Half of Texas wind turbines froze last week, causing wind’s share of electricity to plunge from 42% to 8%.

            5. And that is a particularly blatant lie. Wind only provides 22% of Texas generation capacity. The frozen turbines only account for 16% of the current shortfall, proportionately less than the shortfall from frozen gas plants. Even if the wind farms were operating at full capacity, we would still be undergoing blackouts like the one that is forcing me to type this on an iPhone SE. This particular lie is to promote the fossil fuel generation industry that is about to hammer Texas consumers with “fuel price adjustments.”

            6. Update: with the entirely foreseeable crisis on the wane, the wholesale price of electricity in West Texas is back to $12.53 after days at $9000.00. Here in the South Texas segment of the system it is $112.96. I am wondering at the reaction when homeowners get their next bills with a power cost adjustment hundreds of times higher than the monthly average. My total PCA last month was $24.72. I shudder to imagine next month.

              Meanwhile, all the politicians are running around pointing fingers at everyone but themselves. The primary scapegoat appears to be the agency that handles real-time management of the grid. They don’t generate electricity or regulate the companies that do, and they can’t do much to manage consumption other than to shed load to avoid a—literal—meltdown of critical infrastructure. They saved Texas this week from a statewide blackout that was only minutes away and could have lasted weeks or months.

              Still, it seems that they are going to get the blame, along with the Green New Deal that is only a notion on the national level and not even that in a state that has been controlled exclusively by conservative Republicans since Ann Richards left office at the end of 2004.

            7. TxUser,

              The wind turbines that contributed around 42 percent of the state’s power prior to the storm have frozen.

              This form of energy policy only leads ironically to “green freezes.”

              You need to have backup systems. There are none. Well, there is nuclear, which is carbon-emission free and can generate tons of power — but leftist green wacko tree-huggers don’t want it.

              I know you already know this, but when you get down into the details, the environmental left just wanted to make us poorer and control the means of production. It’s a backdoor to communism. These folks are quite open about it now.

            8. Sarah, you have unfortunately inhaled a bunch of petroleum industry stack gas.

              To begin with, renewables (wind + solar) contributed about 22% of the Texas power supply in 2020, not 42%. There were occasions on windy spring days–when generation was at a maximum and HVAC at a minimum–when renewables contributed almost half, but in the winter (when Texas winds are at a minimum) the grid relies on getting only about 7% from renewables. Despite the turbines that froze, the remaining ones were spinning in a northerly gale and contributed about 8% to the total mix, which was more than expected, not less. Yes, if the other turbines had not frozen they would have helped offset the energy shortfall, but they did not cause it.

              Most of the shortfall this last week was due to a combination of thermal plants (gas and coal) offline for maintenance, constricted gas supplies due to the freeze, frozen coal stockpiles, and frozen cooling water supplies. That shortfall combined with extraordinarily high demand. Around Austin, it is rare to have the temperature continuously below freezing for more than 36-48 hours. It was below freezing at my house for nine days this time with two 10-hour stretches below 10 degrees. There was over a quarter-inch of ice, a foot of snow, and then another quarter-inch ice storm. Areas south of us got a final storm with a further six inches of snow. People were confined to their houses and ran their heaters until the electrical network neared collapse. Because Texas electricity is deregulated, a megawatt/hour that normally sells for $10-25 was going for $9000, and that is going to be reflected in home utility bills.

              Texas does in fact have two nuclear power plants. This is not a state that responds well to “leftist green wacko tree-huggers,” who have absolutely no political power in a state that has not elected a Democrat to statewide political office since 2000, and which has substantial Republican majorities in both houses of the Legislature. However, one of those nuclear plants was knocked offline last week because they did not properly insulate their cooling water pipes against this sort of cold snap. Obviously, they can add heaters… but so can the wind operators. There are turbines turning a profit in lots of cold climate locations in the US and abroad.

              “When you get down into the details,” renewable energy sources are not much more expensive than new thermal energy plants, they have no fuel costs, and they do not generate carbon or nitrogen oxides. The claim by the petroleum companies that renewables are only competitive due to subsidies is pretty rich from an industry that has been heavily subsidized for over a century.

              If you can explain how privately-owned wind turbines and solar arrays amount to Government control of the means of production and a backdoor to communism, I will be interested in the explanation. What do you think about the TVA and the Columbia Basin Project or the Rural Electrification Act?

    1. Well as so many car manufacturers will only be making EVs in 5 years and many countries banning ICE sales within 10 that means there will be little investment in ICE technology within a few years if that is not already the case in fact, so like it or not EV, Hydrogen or some other derivative will be the future. Even the US market can’t, nor will it want to miss out on that inevitable developed world trend especially as in Tesla it started the trend in taking it seriously.

  1. Apple will make cars powered by solar and wind. Which are very cool and sometimes they even work. But not all the time. Apple can specialize in vehicles that it can shut down if the driver is found to saying or even thinking good things about the Constitution, America, George Washington, Abe Lincoln, low taxes, small government, judging people by their character and never by their skin color. Apple could have fun crashing conservatives and killing them, making all the Democrat schemes to cheat in elections unnecessary.

  2. I will not consider a BEV until I can be sure that the batteries have been certified ethically sourced from ecologically remediated mine sources with net neutral environmental harm, and from adult union labor that is inclusive of all genders, races and abilities.

    Will you buy an electric car that exploits women, children, POC and the planet????

    No child labor exploitation for electrons! Gaia will not be raped for battery electric vehicles!

  3. Making this simple: with any new business ventures, namely apple car? There’s always a downside, it’s called beginners luck if it’s successful, and if it fails,…. it’s a risk.
    Made in China? Biggest risk…
    Made in America, and with the biden administration in charge…..
    BANKRUPTCY…….

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