Is Apple Really Building An iCar?

Could Apple really be building a car? Something is going on according to a frenzy of articles, which appeared late last week and over the weekend from the Wall Street Journal (WSJ), Reuters, Financial Times, Quartz and others.

The WSJ reported that “Apple has several hundred employees working secretly toward creating an Apple-branded electric vehicle, [which] has an initial design of a vehicle that resembles a minivan . . .” A minivan?

The Financial Times stated that Apple hired the head of Mercedes-Benz R & D, Johann Jungwirth, to support the company’s new car initiative and that it has also been trying to hire Tesla employees, even as Telsa seeks to lure away Apple employees. 

Reuters also reported that Apple was simultaneously looking into autonomous driving:

Apple is gathering advice on parts and production methods, focusing on electric and connected-car technologies, while studying the potential for automated driving, the source said.

“Fully automated driving is an evolution. Carmakers will slowly build the market for autonomous cars by first releasing connected and partially automated cars,” the auto industry source said. “Apple is interested in all the potential ways you can evolve the car; that includes autonomous driving.”

That would appear to answer the question of the mystery minivan linked to Apple that was seen driving around the streets of Contra Costa County in the San Francisco Bay Area earlier this month.

The Apple car initiative has apparently been in process for at least a year under the leadership of product design VP Steve Zadesky (a former Ford engineer), who is building a “1,000 person team.”

Apple previously announced Car Play, the in-dash iOS-based system designed to integrate with Apple devices. And it was known that Steve Jobs had flirted with developing an iCar. But actually prototyping and building it would be significant new undertaking and well beyond the scope of anything the company has done to date.

Piper Jaffray analyst Gene Munster thinks we won’t be seeing an iCar any time soon (for at least five years). According to a research note obtained by Business Insider, Munster says that the likely purpose of the leaked news is two-fold:

• To give investors confidence that Apple has some new, big products in the pipeline (to sustain/boost its stock)
• To help with hiring of would-be employees for the division

While it’s entirely possible that Apple won’t build its own car — it might be developing software and other systems — it’s pretty interesting and exciting to consider what a self-driving Apple Car might look like or how different it might be from what exits today.

Postscript: Jason Calacanis, in one of his email missives, just made a pretty thoughtful case why Apple (if it really wants to make a car) can/should/will buy Tesla. His hypothetical deal value is $75 billion, which would be 3X Telsa’s current market cap. Apple has roughly $178 billion in cash on hand.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association.