Nobody Needs An Apple Car, Not Even Apple

When you really look at it, Apple investing into building cars, would be a terrible idea.

The whiners, the cry-babies, the spoiled brats and ignorants all have one thing in common — bashing Apple for not innovating. Forget that not even three years ago, Cupertino’s finest turned upside down the entire consumer computing industry by introducing Apple Silicon. I guess, for many, that’s not innovation enough, or barely enough for one year’s news. No, the masses want more. More. Every single year, please. Well, keep waiting, folks, innovation doesn’t just happen overnight, and if you can’t take that reality, have a go at it yourself and learn that lesson on your own skin.

The common ask from Apple for the last few years has been an Apple Car. Not the software, but an actual car. You know, the thing with wheels, seats, bonnet, engine, all the things that make a modern car. We know for a fact that Apple is playing around with certain ideas in the car market, but we don’t know for certain what that entails. We do know however for certain that CarPlay — the software — was left, right and centre at Apple, WWDC 2022 was plenty clear about that! So, on that note, let’s look at why that summer announcement might just be the best one for car fans out there, and why the alternative wouldn’t make any sense to Apple or you and me, in fact.

Learning from Tesla…

I used to be a huge Tesla fan, but lately, I’ve grown a lot colder to the idea of ever owning one, and it’s partially caused by Elon himself. Having a nut-job as a CEO of the car you sit in, doesn’t instil any confidence in me. Then there’s also the fact that more experienced car manufacturers jumping on the electric vehicle bandwagon start to show where Tesla’s cracks are.

Regardless, we’ve learned a lot more from Tesla’s journey than just the fact that electric cars are viable (again, and have always been) and Elon has a temper. It’s a perfect case-study of an arguably popular new car manufacturer, and I’ll focus on four different points.

• Prototyping is the easy part. It really is. Frankly, with a bit of cash, most of us could sit down and build one in the space of just a few months in our spare time. Plenty of new electric car manufacturers have brought out prototypes quite quickly, only to then struggle or choke when trying to productionize it.
• Scaling manufacture. And this is indeed what I’m referring to with turning a prototype into a production unit. Scalable manufacturing has been a science and art for thousands of years, way before the industrial revolution. Our current position in the timeline of civilisation is largely thanks to figuring out how to scale solutions.
• Manufacturing distribution. Tesla, unfortunately for them, proved over and over again, how global distribution of their vehicles is a monumental task because it’s simply not good enough to build cars in location X and then ship them everywhere else.
• Tough competition. We look at the smartphone market and consider it saturated, but car manufacturers have been dealing with very tough competition for many years, and the heat with the new global focus on electric vehicles has just been turned up to 100!

Go big or go home…

In order to succeed in the car manufacturing business, Apple would have to scale an operation to massive levels in an industry it has very little to no experience in. Yeah. I’m an Apple fan, and I don’t think Apple has any experience in vehicle manufacturing. You might claim that they can hire the right people, but that’s not how it works. Apple’s DNA is in computing and software. They would literally have to buy an entire car manufacturer, and even then, I bet the first few years would be an utter nightmare for both Apple and the acquired company.

With electric vehicles, it’s also not just about building cars. While at this point they’d have to be complete nuts to develop a proprietary charging system — though it’s Apple, so never say never — one way or another, I am certain they’d be compelled to deal with the expansion of charging networks across the globe.

You can’t flood the market with cars, and not care about the charging infrastructure.

Dealerships are another important aspect that Apple would likely struggle with. No, they would not go down the Tesla or Ford path and sell online only. It’s Apple we’re talking about, one of the very few tech giants that actually has a solid brick-and-mortar presence. No way they’d go hippie on the Apple Car and just sell online like your grandma does knitted socks on Etsy.

Repair centres are another tangential need. Sure, Apple already has these for their devices, but that’s a whole other ballgame. Broken, faulty phones, tablets, and laptops can just go into a room in the back and be dealt with. Having a parking-lot of faulty cars, however, now that’s a lot less fun or manageable! Repair centres for cars require actual infrastructure, not just two suitcases worth of tools they can ship to your home.

And speaking of faulty cars, let’s not forget the biggest issue — lawsuits. You see, Apple’s worst consumer-inflicted nightmare to date is probably class-action lawsuits. But so far, they have all been about silly things like reducing performance to keep the phone running on a degraded battery, the phone being too easy to bend or some display “varnish” peeling off. In the grand scheme of things, even an outright replacement of the device would be an easy and not too costly fix for Apple.

Cars, however, are a different story because often a lawsuit comes with medical, hospital bills and even death certificates attached. Apple has no experience in any of this. Tesla does now, and it’s struggling. Apple, given its high profile in the tech world, would struggle even more because people would pin literally anything on Apple and when both the car’s hardware and software wears the Apple logo, you can kind of see why they would. Other than the driver and infrastructure, who is there to blame?

Scandals in the automotive industry leave a mark. Everyone remembers the VW emissions scandal. In fact, VW’s big push for electric vehicles is partly to wash its brand identity clean! I really don’t think Apple has the muscle to fight lawsuits like that, no matter how valuable a company it is.

A car, as a product, carries vastly more risk and danger for a business than laptops, phones, and earbuds.

Finally, there’s the aspect of supply and demand. While Tesla’s current supply issues are due to the fact that the electric vehicle market is still new, and plenty of people still regard Tesla as the king of electric cars, there is also another side to this story when looked at from Apple’s perspective. For the last few years, Apple has been struggling to launch new products with enough existing stock. I had to wait weeks to get my Studio Display, I had to wait weeks, even with the preorder, to get my MacBook Air M2, and that’s just a couple of the many products Apple has been struggling to keep in stock.

One could argue that the volume at which computers and phones are bought is much higher than cars, but I don’t know if that’s a valid enough argument. At least a healthy percentage of those who spend today $3500 on a laptop and $2000 on a phone likely also have the purchasing power of an $80.000 Apple Car. Given by the number of people asking for an Apple designed and developed vehicle, I think it’s safe to assume that many of their preorders would be fulfilled two years later.

The future isn’t in cars…

And I guess this is where the topic becomes a little more controversial. People getting more and more environmentally conscious means they want fewer cars on the roads, regardless of what they run on. Cities are adopting more and more hire-by-the-hour vehicles, and many of them aren’t even cars.

I don’t see how Apple would spin the “here we are, another car manufacturer on the market” story, unless it releases its cars only for ride-sharing, as a service, rather than a product you can buy outright, but Apple has never really been the “sharing” type, so I don’t quite see them ever going for that business model with cars. But then again, I am not ruling it out.

Apple Car would be the nail in Apple’s coffin, a coffin it hasn’t had to even think about since 1996.

Poor return on investment

We all know it — even us so-called “sheeples” — Apple likes making good profit on everything they build. Believe it or not, cars don’t make a ton of cash. The general assumption is that car manufacturers make 30–40% profit on each car, but that is nowhere near reality. Porsche — my favourite manufacturer — makes 21% at most on a vehicle sold.

No Apple Car could trump the 911 Porsche. It can’t be done.

As far as I know, the iPhone 13 had a profit margin of 37%, while the iPhone 13 Pro scored around 50% profit on every sale, and these are considered to be on the lower end of the scale, as it can go as high as 200% on certain products. Simply put, if car manufacturers would attempt to make as much profit on cars as Apple does on their devices, we’d all be walking and cycling, which admittedly might just be what most of us need, but that’s another story.

The alternative reality

And thus, meet CarPlay, in the format announced at WWDC 2022. Tight software integration with third-party hardware. You might say, that’s not very Apple, is it? Indeed, that sounds a lot more like something Google would do with Android, which in fact they did. But this is where adopting that model makes a lot more sense.

Car manufacturers have silently admitted — finally — that their proprietary software is just plain shite. Building software also comes with a lot of hassle car manufacturers don’t know how to deal with. On the other side of that reality is Apple who doesn’t know much about building cars, and frankly why go through the hassle of spinning up a new car business when it can just license out their software and provide perfect integration. It’s a much cleaner and leaner business-model. Also, much more agile and profitable.

A successful business only thrives when it focuses on doing what it does well, and for Apple that means, computing.

Attila Vago — Software Engineer improving the world one line of code at a time. Cool nerd since forever, writer of codes and blogs. Web accessibility advocate, LEGO fan, vinyl record collector. Loves craft beer! Read my Hello story here! Subscribe and/or become a member for more stories about LEGO, tech, coding and accessibility!