Image source: Apple.
The fate of Apple's (AAPL -1.93%) Project Titan car program remains highly uncertain right now, after the head of the project reportedly quit earlier this year. Tim Cook dodged questions about an electric car in a recent Fortune interview too, noting that while Apple loves to explore new technologies and products, it doesn't always pull the trigger.
That hasn't stopped Piper Jaffray analyst Gene Munster from making some predictions, though.
Word on the Street
Munster recently put out a research note, believing that Apple is still on track to unveil an electric car by 2019 or 2020, with a commercial launch in 2021. The longtime Apple analyst expects Apple to price the Apple Car starting at around $75,000. Like its other products, the company may outsource most of the manufacturing and production, although Apple will do all the design legwork.
While Apple could easily shutter the project, Munster thinks chances are in its favor, estimating that the likelihood Apple moves forward is over 50%. Even though Apple has seemingly lost a couple of high-level auto talents, it still has upwards of 1,000 auto engineers, which suggests that the company is still seriously considering the idea.
Moving on down?
A $75,000 price tag makes sense for a number of reasons. For starters, Apple has always been a premium player in any market that it enters, and if the tech giant comes out with a car, you can expect it to be a luxury electric vehicle.
That would also put it in direct competition with Tesla (TSLA -3.45%), which would actually be a good thing from Tesla's perspective. Tesla has long welcomed EV competition, and Apple could help with the company's goal of accelerating EV adoption as well as battling the traditional dealer model.
If Apple follows Tesla's lead, a bigger question would be if Apple follows Tesla downmarket to address mainstream consumers, which Tesla plans on doing next year. Apple has a demonstrable history of resisting downmarket moves in most cases (other than the iPad), although in recent years Apple has been more willing to introduce mid-market products. In Cook's words (in the context of the smartphone market), "There's always a large junk part of the market. We're not in the junk business."
Entering at the high end of the market would have greater implications for revenue growth though, which is often considered a primary motivation for Apple's theoretical entry since the iPhone has seemingly peaked and investors demand growth. Considering the fact that the U.S. market for luxury vehicles is only about 100,000 units, it seems that Apple would eventually want to expand to the mid-range market, which is about 500,000 units.
Would you buy a $75,000 Apple Car?
