Will Apple overthrow Tesla?

"Apple in the automotive industry" and "Apple-branded cars" are the two sexiest labels in the automotive industry. The former symbolizes the highest glory of the upstart Tesla's ten-year battle, while the latter heralds the ambition of the old rich Apple.

In 2019, Tesla became the world's top seller of new energy vehicles with 360,000 vehicles sold. Elon Musk, who took the top spot, acted in an unusually high-profile manner, frequently attacking competitors on Twitter. Apple's confusing car-making plan has never been revealed to the public, but it has been sneaking around at a speed that exceeds expectations.

According to Patently Apple, since 2017, there have been 69 patents under the label of "Project Titan" (Apple's car-making project), covering autonomous driving, power systems, vehicle systems and body structures. Coupled with the $100 billion cash flow that is enough to buy the entire Tesla, Apple, which "builds cars behind closed doors", is regarded as one of Tesla's strongest challengers.

Destroying you has nothing to do with you. It was not Motorola but Apple that killed Nokia. It was not Toyota or Volkswagen that surpassed BYD and became the king of new energy vehicles, but Tesla. Some people even joked that it was takeaway that killed instant noodles. It is often not the visible opponent that kills you, but the dimensionality reduction attack from the next era.

Everyone is looking forward to the arrival of a new species that will subvert tradition and break the limits of imagination.

Apple Night Sneak 

With the puzzle pieces of more than 60 patents of Apple's "Titan Project", the prototype of Apple's car is gradually emerging. Apple supply chain analyst Ming-Chi Kuo predicts that Apple's Dream Car may be officially unveiled in 2023-2025.

By presetting the destination through CarPlay and starting the autonomous driving navigation system (ANS) with one click, Apple Car can automatically take the user to the destination.

The iPhone is the car key (Apple CarKey), and facial recognition can also open the door of an Apple car. Smart door hinges bring the experience of "opening and closing a computer with one hand" to the car, and the tactile feedback device will increase resistance or vibration feedback in an emergency to increase safety. The seat belt has become a "touch bar" that can not only adjust the call volume, but also has the function of detecting drunk driving and heating.

The car windows have anti-peeping functions, and can also adjust the lighting conditions inside and outside the car through "AC modulation waveform" to protect the driver's eyesight. Rearview mirrors are no longer necessary, and the images can be projected onto the side windows or the head-up display HUD (parallel display system). Wearing AR glasses can get maps, and rear passengers can instantly enter the work environment through the VR system and start the cloud office mode.

The "night mode" uses autonomous driving, and can also change the vehicle's vision to give feedback to pedestrians on certain roads (such as school roads). The car body is covered with solar cells, and the battery can be replenished anytime and anywhere, without worrying about battery life. The wireless charging parking lot solves the problem of forgetting to charge when parking and the problem of incompatible sockets.

The car that Apple is planning is like an "upgraded combination" of the iPhone and the MacBook. Having been deeply involved in the 3C digital field for decades, Apple is more likely to touch the pain points of users than Tesla.

Apple's "Titan Project" self-driving test car Source: Patently Apple

For six years, Apple has been working on Project Titan in the dark. Its goal is to build a disruptive product from scratch and replicate the success of the iPhone in the automotive field. During these six years, strict and cautious confidentiality measures have permeated every aspect of Apple's car-making plan. In 2016, the once-shelved Project Titan was restarted, and the development route was adjusted from vehicle manufacturing to autonomous driving technology research. But until last year, rumors about the project's abortion still appeared from time to time.

What is hidden under the table is often the biggest trump card. The "Titan Project" has not disappeared, but is progressing rapidly. From the content of its recently published patents, we may be able to get a glimpse of Apple's ambition to build cars. 

Faced with the aggressive development momentum of latecomers, Tesla's technological and market advantages are still far from reaching an unshakable level. 

In the fiercely competitive automotive industry, it is difficult for a single company to occupy an absolute monopoly market share with its technological advantages. Japanese cars, which currently have the highest global market share, had a market share of 26.79% in 2018; Toyota, which ranked second in sales, only had a market share of 11.07%. Tesla won the global new energy vehicle sales championship last year, occupying a market share of 16.64%, and this proportion may be further diluted as the market matures.

In terms of brand and concept marketing, which Tesla is best at, Apple can be regarded as the originator. Moreover, Apple, with a market value of over one trillion US dollars and a cash flow of 102 billion US dollars, is enough to have a crushing advantage over Tesla.

The revolution of "software-defined cars" has awakened the tech giants, and old rivals in the smartphone field have rushed into the smart car scene to open up a new battlefield. Apple is not the only company that has the potential to kill Tesla.

“Tesla killers” assemble

The fiercely competitive smart car track is crowded with the "Tesla killers" who are eyeing it covetously.

In the field of autonomous driving, Tesla has long been left behind by Waymo, a subsidiary of Google's parent company. In the annual autonomous driving car rankings released by the US research institution Navigant Research in March this year, Waymo is recognized as the first-tier leader, while Tesla's autonomous driving is at the bottom.

Navigant Research's 2020 Autonomous Vehicle Rankings Chart: Future Car Daily

In addition to manned autonomous driving, Waymo has also launched the Waymo Pet service for picking up and dropping off pets and logistics delivery services, and the outline of the autonomous driving ecosystem is gradually becoming clear.

Waymo Pet, a pet delivery service. Source: Waymo

In UBS's view, Waymo's value lies more in its cooperation with Google to form an autonomous driving ecosystem: it can collect road and user preference data from Google Maps and Google Search, provide entertainment services with YouTube and PlayStore, provide intelligent voice services through Google Home smart speakers, and use software expertise to manage fleets. In the words of analysts at Wall Street investment bank Jefferies: "Google wants to make cars like your living room." 

Google and its parent company Alphabet's business map Source: Invex News

As the top candidate for the future travel throne, the war between Waymo and Tesla is imminent. Seeking Alpha, an American investment research platform, believes that Waymo has formed a competitive barrier and once it becomes an independent company, its future value will even exceed that of Google.

 Xiaomi watch with NIO App installed Source: NIO official

In July 2018, several hardware manufacturers including vivo, OPPO, Midea, and TCL announced the establishment of the IoT Open Ecosystem Alliance. Huawei also launched its smart home brand HiLink (Huawei Smart Selection) last year. Baidu's Xiaodu in-car system, Alibaba's Tmall Genie Auto AI+ program, and Tencent's AI IN CAR all have extensive cooperation with automakers. Xiaomi is trying to extend the smart home ecosystem and move the living room into the car. A Xiaomi executive told Future Auto Daily (ID: auto-time): "For Xiaomi, cars are an indispensable part of the ecosystem." 

Huawei's HiCar ecosystem partners include more than 30 automakers and more than 120 models. Vehicles equipped with the HiCar system can connect with 130 million Huawei smart terminals for "people-car-home" connectivity. The cooperation between Hongmeng OS and Chery, the maturity of vehicle-mounted modules, and the authoritative verification of the MDC smart driving platform indicate that Huawei is ready to "get on board".

If Huawei becomes a super supplier of automobiles as it wishes, it will inevitably compete with Tesla for the right to speak in the industry chain. In terms of the ability to integrate software and hardware, it has more experience than Tesla. A luxury car brand practitioner told Future Auto Daily (ID: auto-time): "Huawei is most likely to become the Bosch of China." Bosch, with sales of hundreds of billions in China, is the world's largest supplier of automotive technology. International giants including Bosch, Continental, and Denso occupy 70% of the global market.

The wave of the "New Four Modernizations" has opened the door to the automotive market for technology giants and unicorn companies. But there are bright spots and many setbacks along the way.

Most of the cross-border players who have devoted themselves to car manufacturing have no shortage of money. From Samsung, Yamaha, Dyson, Evergrande, Wuliangye, Gree, to Kalashnikov, the well-known arms dealer that manufactured the AK47, they are all leaders in their respective niches. But when it comes to car manufacturing, money alone is far from enough.

The engine of Takumi's AE86 in "Initial D" was provided by Yamaha Source: Initial D Movie

Faced with the most realistic profit problem, Dyson, who lost 18 billion yuan, sadly gave up his dream of making cars. Yamaha, which has already released two concept cars, announced at the Tokyo Motor Show that it would give up making cars because it "could not stand out in the fierce competition." Samsung, which invested in car manufacturing in the last century, eventually became a Renault OEM; Evergrande, which spent nearly 5 billion US dollars on "buying, buying, buying", has not yet unveiled its first mass-produced car; Midea, a home appliance giant that failed in commercial vehicle manufacturing, recently shifted its focus from vehicle manufacturing to suppliers.