tesla versus apple

Tesla is among the biggest success stories in recent years. Its market cap surpassed $1 trillion last year and it became the first automaker globally to achieve that feat. So far, none of the legacy automakers has been able to challenge the company’s dominance.

Tesla’s CEO Elon Musk has mocked legacy automakers multiple times, and in the past and compared gasoline cars to steam engines. That said, legacy automakers are also now pivoting towards electric cars and are quickly ramping up their production.

Bank of America believes that in the US, both Ford and General Motors would gradually snatch market share from Tesla. The Elon Musk-run company lost the title of the world’s largest seller of new energy vehicles to BYD Motors after it lost production in China.

Meanwhile, many believe that the real challenge for Tesla would not come from legacy automakers but from Apple. In the past, analysts like Gene Munster of Loup Ventures have said that Apple’s eventual entry into the EV (electric vehicle) industry would be the biggest threat for Apple.

Adam Jonas of Morgan Stanley also has similar views. Notably, both Munster and Jonas are pretty much “perma bulls” on Tesla. Munster, who correctly predicted Apple’s market cap hitting $2 and $3 trillion, forecast that Tesla’s market cap would hit $2 trillion.

Survey Finds Apple Cars Could be More Popular Than Tesla

Strategic Vision conducted a survey of 200,000 new car buyers and for the first time, it included Apple cars on the list of potential cars that buyers would like to buy. The results showed that Toyota topped the list followed by Honda. 38% and 32% of the respondents respectively said that they would consider a Toyota or a Honda brand car in the future.

26% of the respondents said that they would ‘Definitely Consider’ an Apple car in the future. Ford came fourth with 21% while Tesla was in the fifth position with 20% saying they would consider a Tesla car in the future.

The survey results might sound counterintuitive as Tesla sells the most electric cars in the US and is the market leader by a fairly wide margin. The company has good pricing power also and has raised car prices multiple times over the last year.

Vision President Alexander Edwards said “What should be concerning to others is that Apple generates a greater amount of Love than any other automotive company, double that of strong brands like Honda, Toyota, and Tesla. For example, over 50% of Tesla owners would ‘Definitely Consider’ a future Apple vehicle; everyone should be prepared.”

What All do We Know About Apple Cars?

Apple has long been rumored to be working on an electric and autonomous car under an internal project named “Titan.” Meanwhile, 34% of respondents in the survey said that they “Don’t know enough about.” The results are not surprising as not much is known about Apple cars, at least officially.

In the past, Apple was rumored to be in talks with Hyundai and Nissan to manufacture its cars. Some even believed that Apple would partner with Fisker or Lucid Motors to produce cars. Lucid is led by a former Tesla employee Peter Rawlinson and the company is struggling with deliveries. It has slashed its 2022 production guidance twice this year.

Fisker has partnered with Magna for its first car and Foxconn for the second vehicle. Foxconn, which is among the major Apple suppliers, also bought the Lordstown plant from Lordstown Motors and would produce cars at the plant under a third-party agreement.

Apple Could be the Tesla Killer

Wall Street has always been obsessed with “Tesla killers” and analysts have branded many EV companies and models as such. However, in reality, none of the cars or EV companies has come closer to being a Tesla killer. Lucid Motors is a good example here. The company went public last year in a high-profile SPAC merger, which was the biggest such deal of that time.

Fast forward to 2022, Lucid Motors hasn’t been able to match the hype and is struggling with execution. To be sure, even Tesla faced production troubles in the past especially when it was ramping up Model 3 production. Musk described it as a “production hell” and has said that he was contemplating selling the company to Apple then.

Tesla stock has since rebounded and proved critics wrong. While Wall Street is as divided as ever on the company, many analysts recently reiterated their buy rating on Tesla stock after Biden signed the Inflation Reduction Act.

So far, Apple hasn’t been able to identify a partner for its EV business. The company always has the option of building cars on its own like Tesla, however, that does not look likely. Foxconn’s entry into EV contract manufacturing meanwhile would meanwhile help Apple as the two companies have a long-standing partnership for making iPhones.

Apple to Hold Launch Event This Week

Apple is set to hold its launch event this week where it is expected to unveil the iPhone 14. Morgan Stanley and Bank of America reiterated their bullish calls on the company and advised investors to buy Apple stock. Apple is the best-performing FAANG stock of the year and has also outperformed the broader markets.

Over the long term, Apple’s entry into EV and autonomous driving would be a key driver. Analyst Katie Huberty believes that an entry into mobility would lift Apple’s TAM (total addressable market) 20-fold. With its strong brand and focus on quality and innovation, Apple might just be the Tesla killer that analysts have been prophesying for a long.

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