Seven years of indecision, Apple: it’s too hard to build a car!

Apple’s car making is already a topic that is too old to be discussed, as it launched the “Titan” project as early as 2014, intending to launch a new energy car that can compete with Tesla. In order to build this car, Apple has used its huge resources to gather engineers from Chrysler, Tesla, Ford and other companies in its car-making team in just six months, with a team size of more than 1,000 people.

However, Apple’s big announcement didn’t end well, because just over a year later, in 2016, its car-building plans were put on hold in favor of developing self-driving technology. Today, Apple’s self-driving technology has made great progress, with its self-driving mileage exceeding 30,000 kilometers in 2020 and its longest “hands-off” distance extending to 232 kilometers.

Interestingly, after Apple’s success in self-driving, it has remembered its initial intention to enter the automotive field, and in January 2021, Apple has restarted its car-making plans and has tied up with Hyundai Kia and Nissan. However, Apple’s car-making plan is a repeat of what happened 7 years ago, as traditional car companies are not professional OEMs like Foxconn, and they are not interested in OEMs for Apple at all.

Seven years of indecision, Apple: it's too hard to build a car!

Recently, there is news that Apple’s self-driving team is currently in personnel turmoil. After Apple restarted its announcement to restart its car-making plan, its executives have left one after another within a few months, with less than 12 executives left in the current team. This shows that Apple in recent years from the car to self-driving software and then to build a car, can really be described as a series of twists and turns.

It is worth mentioning that, according to the Japanese Nikkei News, Apple has negotiated with at least six automakers for its car-making plans, but all of them have refused to cooperate with Apple without exception. So what is it that makes automakers so uncomfortable with Apple?

Why do car companies turn their noses up at Apple?

In the era of software-defined cars, Apple and Huawei have huge potential in the field of smart cars, while traditional car giants are at a disadvantage in terms of intelligence. Traditional car companies help Apple to produce cars on their own, which is like digging their own graves, so no top car company will help a potential competitor to build cars on their own.

In fact, a big part of the reason why Apple’s car-building plan was put on hold in 2016 was that it had been shut down by such giants as BMW, Daimler, Toyota and Volkswagen, of which Toyota and Volkswagen were precisely because they were afraid of hand-cultivating a strong competitor.

Secondly, the strong Apple wants to form a strong supply chain network, and in the cooperation with car companies from the whole car design to product marketing are dominated by themselves, for which the car companies need to do only the OEM “hard work” which has little technical content. From this, it can be seen that the car companies cooperating with Apple do not have any decision-making power in the cooperation, nor do they learn any technology.

In fact, this matter we can also stand in the human perspective to understand. Traditional car companies with hundreds of years of experience are like a group of seniors with absolute authority, while Apple, which is still far from touching the threshold of mass production vehicles, is like a fledgling recruit. Want a group of old seniority without the right to speak to listen to a new recruit blind command itself is not realistic, after all, traditional car companies are not professional to do OEM Foxconn, they are also the pursuit, to save face well.

You know, now a little bit of interest in the traditional car companies are riveted to think about how to transform. The cooperation with Apple’s foundry, whether it is for the car companies’ own industry, or brand value will not be too much, so this cooperation model is obviously not what the auto giants want.

Seven years of indecision, Apple: it's too hard to build a car!

Finally, there is the most realistic problem, that is, money. For the top car companies, the profitability of doing OEM work for others is definitely far from their own R&D and car making. If you can build a car by yourself, why do you need to do OEM for others?

As a real industry, production capacity is an important indicator for a car company to make money, and the top car companies that Apple wants to cooperate with have tight production capacity, and they have to work 24/7 in order to improve production and sales, so where will they have extra capacity to do OEM work for outsiders? OEMs take up capacity and profits are relatively low, so it is not worthwhile for car companies to OEM for Apple.

In Xiao Lei’s opinion, since the road to the top car companies has basically been cut off, if Apple does not want to build its own car factory, then finding a professional car OEM may be the only choice for Apple to continue to complete its “Titan” car building plan. Because there is no competition and no conflict of interest between car OEMs and Apple.

The foundry is Apple’s best partner

When it comes to Apple as a foundry, I believe many people will think of its old buddy Foxconn. Indeed, Foxconn and Apple have many years of cooperation experience, the two sides have a very high tacit understanding, the two companies complement each other, it can be said that if there is no Foxconn, Apple will not achieve today’s success, if there is no Apple, Foxconn also can not reach the current glory.

However, in Xiao Lei’s opinion, although Foxconn has a pivotal position in the field of cell phones, tablet PCs and other FMCG digital products foundry, and Apple has rich experience in cooperation, it is still a fledgling newcomer in auto foundry even though it has set up a joint venture with Geely to focus on auto foundry business. With Apple’s previous experience in seeking cooperation with the world’s top car companies, it is difficult for Apple to look at Foxconn, which has no background in car manufacturing, as well.

In addition, Apple has been gradually reducing its dependence on Foxconn in recent years, and Foxconn has been working on other businesses for several years, hoping to take the initiative to achieve de-Appleization. If Apple intends to reach cooperation with Foxconn in automotive foundry business, then with the tacit understanding between the two of them for many years, it should have been a long time ago, and Apple’s car-making plan would not have been delayed until now without any substantial progress.

Seven years of indecision, Apple: it's too hard to build a car!

In addition to the field of electronics foundry Foxconn, in the automotive field there is such a giant, it is the world’s third largest auto parts supplier, but also called “car foundry emperor”, which we are familiar with the Mercedes-Benz G, Jaguar I-PACE and other luxury cars are from its handiwork, its name is Magna.

Magna has a wealth of experience in automotive design and OEM, and the products designed by OEM are mostly high-end luxury brand models. Xiao Lei believes that if Apple wants to find a car OEM that has both high-end attributes and car-making heritage, then Magna will perfectly meet Apple’s requirements.

In addition, Magna has been negotiating with Apple since seven years ago, when Apple first revealed to the outside world about car manufacturing. Thus, Magna, which has both strength and reputation in the automotive field, is likely to become the preferred OEM for Apple’s car-making plan.

Summary

Seven years ago, when traditional car companies heard about Apple’s “Titan” project, they all trembled, and Li Bin, founder of the new car giant Azera, even said that Apple would be the biggest competitor of Azera. Now, Apple’s “Titan” plan, which was so powerful back then, is almost dead in name only.

According to Xiao Lei, Apple’s road to building a car has been bumpy mainly because of its attitude in seeking cooperation and the problem of the partner it seeks. Apple is looking for help from its most direct competitor to build a car, not to mention that there are some unspoken risks involved, at the very least, it does not have the right attitude towards its own offspring. If Apple enters the game with an arrogant attitude and seeks cooperation with an arrogant attitude, who can guarantee that it will not treat its trusting users with arrogance in the future?

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/seven-years-of-indecision-apple-its-too-hard-to-build-a-car/
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