Over the weekend the bombshell was dropped all over the media channels – according to sources Apple Inc. is mulling the development of an electric car, called Project Titan.
With information pouring in from different sources, we’re safe to assume this is one rumor that we might want to take for granted, even though the Cupertino-based technology giant has been known to fiddle with new technology and then dump it. But, before the reports pan out and we see that electric “iCar” on the roads – with sources even pointing that until that happens it might evolve into an autonomous project, just like Google’s – let’s see the challenges Apple has to face before entitling itself as an automaker.
The technology giant has a few hundred people, including new hires from the auto industry to work on a skunkworks project that would bring to life a minivan-style electric car. That would challenge only part of the established industry players, such as Tesla Motors, Nissan, GM or Ford – all of them having fully-electric or hybrid vehicles. “They weren’t in the phone business and succeeded, but the car business will be more difficult by two orders of magnitude,” believes Erik Gordon, professor at University of Michigan’s Ross School of Business.
If the Titan project comes to life, Apple should be prepared for: increased safety rules, an ever-changing landscape for regulations and incentive offers when it comes to zero-emission vehicles. Additionally, the costly to design and even costlier to manufacture electric cars have low earnings margins and traditionally come with high losses – which Apple profit-loving investors haven’t experienced. And ultimately, with such low prices for gasoline around the world, buyers have even fewer reasons to buy an electric car – which usually cost an arm and a leg, have limited range and recharge in hours, not minutes.