Please ensure Javascript is enabled for purposes of website accessibility

Apple, Inc. Is Pushing Ahead With Testing Self-Driving Cars

By Evan Niu, CFA – Apr 15, 2017 at 7:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The California DMV grants Apple a permit to begin testing.

Apple's (AAPL -1.96%) autonomous-car plans have been seemingly up in the air for the past year. The New York Times reported in September that the company was rethinking its strategy, laying off "dozens of employees" in the process. A month later, in October, Bloomberg further detailed the shift, saying Apple had "drastically scaled back its automotive ambitions" and was instead focusing on developing autonomous-driving software; Apple was reportedly no longer interested in actually building a car -- even though focusing on software without integrating the hardware is decidedly very un-Apple-like. Apple then sent a letter to the National Highway Transportation Safety Administration in December, confirming that it was making self-driving-car investments while offering some input on the proposed Federal Automated Vehicles Policy.

The most recent development is that Apple has now secured a permit from the California Department of Motor Vehicles to test autonomous vehicles.

Visualization of autonomous driving software

Image source: Getty Images.

Last but not least

Last week, the California DMV updated its site for autonomous-vehicle testing. Manufacturers that hold permits to test autonomous vehicles are listed in chronological order, and "Apple Inc." is the latest addition.

These are the same permits that Uber complained about in December, after the DMV told Uber it needed to obtain a permit to continue testing its self-driving cars. The episode was a bit absurd, since the permits cost just $150, and Uber moved its self-driving-vehicle pilot to Arizona instead, a transition that undoubtedly cost much more than $150. Uber has since relented and obtained its permit last month. (Uber is listed a few spots above Apple.)

Bloomberg says Apple is nearly ready to begin testing its autonomous-driving software, and the California DMV permit includes three Lexus hybrid SUVs and six drivers; a driver must be present to disengage the autonomous-driving software if necessary. Manufacturers with permits must also submit annual disengagement reports that detail when a human driver had to take control during testing.

Technology first; strategy later

The hardest nut to crack when it comes to self-driving vehicles is the software. Most companies have gravitated toward the same set of hardware sensors, more or less. With one notable exception, most approaches include some type of LIDAR system combined with radar and cameras. It's not clear what hardware suite Apple is planning on using, but presumably it is exploring several potential configurations.

It seems that Apple's overall strategy is still up in the air. Apple would probably prefer to build its own vehicle with integrated hardware and software, but manufacturing vehicles in volume is incredibly difficult and expensive. Yet autonomous driving as a technology has so much potential to save lives and deliver societal value in other ways -- such as convenience and vehicle utilization efficiency -- that Apple can't ignore it.

Given the regulatory considerations, combined with the leaky nature of Silicon Valley, there's no way for Apple to keep its plans completely secret. For now, it looks as if Apple is pushing ahead with testing its self-driving-car software and will figure out the market strategy later. 

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Apple Stock Quote
$148.11 (-1.96%) $-2.96

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.