You make a good point but my question still stands, why couldn't they design it in California and outsource manufacturing to Hon Hai/Foxconn the way they do with their phones? Unlike Tesla, sourcing the parts wouldn't be Apple's problem.
Because outsourcing car manufacturing doesn't make much sense. The transportation costs eat up most of the savings. That's why Toyotas, Volkswagons, etc sold in the US are made in the US.
One shipping container holds 60,000 iphones. One shipping container holds one car.
I agree. and it's not just transportation, or even taxes, it's also the cost of labor. iphones are assembled in china because chinese workers are cheaper than automating those particular jobs. cars, on the other hand, are almost entirely made by robots these days.[1] there's not as big a price difference between chinese and american robots as there is between chinese and american humans.
apple has a history of entering fairly high-margin markets where the existing products don't look or feel or function very well, and then they give it the jony ive treatment. but tesla is already there, they applied apple's playbook to cars and honestly took much bigger risks to get there than apple ever would. tesla took on a LOT of debt to be competitive, and it'll be a while before they even have profit, much less good margins. it'd be very hard for apple to compete. if apple ever enters the car market, a tesla acquisition is the only thing that would make sense to me.
Fascinating! Specifically with respect to NAFTA & its possible renegotiation.
It also makes me realize how terrifying it must be for major manufacturers to site capital-intensive factories. Wrong country? Or country that becomes wrong country a decade later? 25% tariff.
> Because outsourcing car manufacturing doesn't make much sense.
#1 It allows you to focus on design as opposed to supply chain management. #2 If the supply chain is centralised where production takes place then that bit of missing trunk carpet, as Elon Musk lamented, won't take two weeks to get to you and hold up the production line - It's down the road.
> One shipping container holds one car.
Which makes me think - the economics change if the vehicle you're shipping is only 1/2 or 1/3 the size of a typical car. When you have an electric automated vehicle why are you sticking with a sedan or truck sized vehicle when you can move individuals or couples?
Electric cars stick with the sedan/truck model for the same reason non-electric cars do: it is what people actually want. 90% of the time a car/truck only carries one person to/from work with nothing else. However that other 10% means the single occupant car will not work.
I have a car that gets 40mpg, and a truck that gets 18mpg. After you account for the extra insurance, license, taxes, and maintenance on my car, I'd be money ahead getting rid of the car and just driving my truck for everything even though times when I need a truck and a car will not do account for maybe 2% of my driving. Note that my car and truck a both paid for, if I'm making payments on both the math is even more lopsided toward not having a car.
People keep pointing out that I can rent a truck when I need on. However this is something is is true in theory, but not practice. It is actually hard to find someplace that will rent you a truck that allows you to use it. Want to take your rental truck off road - not allowed. Want to tow a trailer - most don't allow that. Want to put a sheet of plywood in the back - most don't allow that soft of damage. (though in this case the store probably has the best price and will allow it)
> Electric cars stick with the sedan/truck model for the same reason non-electric cars do: it is what people actually want.
Precisely this. Actually, you don't need to take our word for it. Several manufacturers small and large have tried the "tiny electric car" concept in Europe, a continent much more in love with small cars than the US, starting over a decade ago, and none have actually made it a success. E.g. the Reva (G-Wiz in the UK) was in sale from 2001 to 2013 with a total of 4 600 cars sold worldwide.
Compare that e.g. to the sales volumes of the Renault Zoe (60 000 cars sold since 2012) or the Nissan Leaf (250 000 cars sold since 2011).
You make the mistake of thinking Apple cares about market share. Their philosophy has always been to take the largest share of profit [1], with their phone market share hovering around 10% depending on country. Similarly their computer market share hovers around 5%, but it remains highly profitable.
Pair automation with a small, likely stylish car and demand from city-dwellers would be enough if Apple released something compelling.
Apple has never been a company that serves everyone, hence the reason they have a only a minor market share. They care about aesthetics and ease of use - which is why there isn't the tractor equivalent of a smart phone in their lineup. Your shoulder use cases means you probably wouldn't buy a vehicle made by Apple, similar to how if you need X feature in a phone and Apple doesn't provide it you'd buy a suitable alternative.
Let's go backwards with this one: What are most road trips for? Commuting. Would Apple want to make a vehicle for all uses and conditions? Doubtful. Would Apple want to make a truck? Highly doubtful.
They only need to make a vehicle that covers a considerable number of (but not all) use cases. If it can get people to work, to a store, to a friends house, to a restaurant or bar then the number of people who would want one is considerable. It would probably be better suited to those living in cities, but that's still a lot of people who notably require something that doesn't take up much space as parking is at a premium. Better yet, the vehicle could park itself, return home when not needed, pick up the occupant on demand or even car-share the way Elon Musk predicts Tesla owners might lease their vehicles.
