Apple Inc., which has been working secretly on a car, is
pushing its team to begin production of an electric vehicle as early as 2020,
people with knowledge of the matter said. The timeframe -- automakers typically
spend five to seven years developing a car -- underscores the project’s
aggressive goals and could set the stage for a battle for customers with Tesla
Motors Inc. and General Motors Co., both of which are targeting a 2017 release
of an electric vehicle that can go more than 200 miles on a single charge and
cost less than $40,000.
Apple, which posted record profit of $18 billion during the
past quarter, has $178 billion in cash with few avenues to spend it. The
Cupertino, California-based company’s research and development costs were $6.04
billion in the past year, and Chief Executive Officer Tim Cook is facing
increased pressure to return cash to shareholders. The CEO has been pushing the
iPhone maker to enter new categories to further envelop users’ digital lives
with Apple’s products and services.
Apple’s possible foray into cars follows a similar path it’s
taken to break into other industries. The company wasn’t the first to make a
digital-music player or smartphone, and only entered those markets once it had
a product that redefined those categories.
Car Team
Tesla’s success in creating a startup car company has shown
that the traditional barriers of entry into the auto industry aren’t as
difficult to overcome as originally thought, said one person, who asked not to
be identified because the matter is private. At the same time, automakers have
struggled to bring technical leaps to car development, something that Silicon
Valley is also seeking to accomplish. For example, Google Inc. has invested in
developing an autonomous vehicle since 2010.
Apple may decide to scrap its car effort or delay it if
executives are unhappy with progress, as they’ve done before with other secret
projects. The car team, which already has about 200 people, began ramping up
hiring within the past couple of months as the company sought out experts in
technologies for batteries and robotics.
Battery Lawsuit
An experienced automaker typically spends five to seven
years developing a new vehicle before bringing it to market. A lawsuit filed
this month gives a window into Apple’s efforts to create a automotive team for
the project. Apple began around June an “aggressive campaign to poach”
employees from A123 Systems LLC, the Waltham, Massachusetts-based battery maker
said in a lawsuit against Apple filed this month.
Apple hired five people from A123 and has tried to hire
battery experts from LG Chem Ltd, Samsung Electronics Co., Panasonic Corp.,
Toshiba Corp. and Johnson Controls Inc., according to the lawsuit. Tesla CEO
Elon Musk told Bloomberg Businessweek this month that Apple was seeking to hire
away his workers, offering $250,000 signing bonuses and 60 percent salary
increases.
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