Please ensure Javascript is enabled for purposes of website accessibility

Those Silly Apple, Inc. Rumors About Faraday Future Look Even Sillier Now

By Evan Niu, CFA - Jan 7, 2016 at 12:00PM

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

There was never a chance that the tech titan was secretly backing this electric car startup.

The FFZERO1 will never make it into production. Image source: Faraday Future.

Do you remember a couple of months ago when a bizarre rumor emerged about Apple (AAPL 0.03%) and super-secretive Silicon Valley electric car start-up Faraday Future?

Specifically, the idea was that Apple could be using Faraday Future as a front, kind of like a shell company, to veil its buildup of critical manufacturing infrastructure. The two companies' shared emphasis on secrecy is a common trait, and both are expected to challenge Tesla Motors (TSLA -2.44%) in the near future. Faraday Future also had a mysterious source of funding, as it plans on building a $1 billion manufacturing facility in Nevada. That's but a tiny dent in Apple's cash position.

But beyond these shallow commonalities, this rumor really never made sense to begin with. And now that Faraday Future has unveiled what it's up to, the idea looks even sillier.

This is about as un-Apple as it gets
At the Consumer Electronics Show in Las Vegas earlier this week, Faraday Future hosted its first unveiling event for its electric concept car. The FFZERO1 concept's "projected specifications" included over 1,000 horsepower and a 0-60 mph time of less than 3 seconds. Oh, and it only seats one person. The car itself is quite over the top and unrealistic.

Faraday Future is working on a Variable Platform Architecture, or VPA, that utilizes modular components with the hopes of accelerating development time frames for a wide category of electric vehicles. The Batmobile-looking thing is just an example of a type of car that could be possible on the company's VPA. Faraday Future says it will have real cars to show off in a couple of years.

But the presentation was poorly delivered and the company raised more questions than it answered. Faraday Future made a wide range of hyperbolic claims about how it would revolutionize the auto industry, including a direct comparison of itself to the iPhone in 2007. We're talking about statements like "We need to define the future from the future's perspective," and that the company is working on "nothing less than a complete rethink of what mobility means." Yet it didn't provide any real detail or tangible strategy or model.

Now, Apple is no stranger to hyperbole, but at least when Apple makes a bold claim it at least attempts to back it up with some type of evidence or new product or feature. And Apple would never host an event years in advance to show off an unfinished product.

At the same time, the identity of Faraday Future's backers was also revealed: China's LEtv. LEtv is an online media streaming company in China, often referred to as the "Netflix of China," and they have created an automotive division to partner with Faraday Future. LEtv will help Faraday Future find additional investors as well as help enter the important Chinese auto market. It will also help build up connectivity infrastructure and content to integrate with a future electric vehicle made by Faraday Future.

He didn't say no
Now, none of this is to say that Apple isn't working on an electric vehicle. There's way too much evidence that suggests it is. The most recent clue was on a 60 Minutes segment on Apple that aired last month. When asked point blank whether or not Apple would ever enter the car market, Tim Cook was rather coy.

I mean, seriously, look at this guy:

This is how Tim Cook responded when asked about the Apple Car. Image source: 60 Minutes.

Clearly, Apple is up to something, and it most certainly is not (and never could have been) Faraday Future.

Evan Niu, CFA owns shares of Apple, Netflix, and Tesla Motors. The Motley Fool owns shares of and recommends Apple, Netflix, and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Inc. Stock Quote
Apple Inc.
$164.92 (0.03%) $0.05
Tesla, Inc. Stock Quote
Tesla, Inc.
$850.00 (-2.44%) $-21.27

*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 08/10/2022.

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.