Charged: Apple's Potential EV Entry Seen As 'Tesla Bear Case'

Welcome to The Fly's latest edition of "Charged," where we look at some analysts' notes, news and activity in the electric vehicle and clean energy space.


Shares of Apple (AAPL) were in the spotlight on Tuesday following a report from Reuters claiming that the company is moving forward with its self-driving car technology and is aiming at 2024 to launch a passenger vehicle that would include its own battery technology.

Following the news report, Morgan Stanley analyst Adam Jonas told investors that it has "long been the auto and tech hardware teams' collective working assumption" that Apple will design and engineer a car one day. The firm's teams have also "long felt" that tech players like Apple "represent far more formidable competition" potentially for Tesla than the legacy automakers, Jonas said. Monday's story on Apple and its "Project Titan," after a period when such stories have remained "relatively dormant," are a reminder of the potential scope of competition for capital, talent, and eventually market share with the EV arms race still in the early stages, Jonas added.

In a research note a few days later, Jonas added that he views the report that Apple may plan to introduce an electric vehicle as soon as 2024 as "one of the biggest 'moments' in the autos and shared mobility industry in 2020" as well as being "perhaps the most credible/formidable bear case for Tesla's (TSLA) stock that investors have had to consider for some time." While a company with Apple's resources entering the market could represent a significant inflection in the speed and magnitude of a wide range of investments in the auto space and be a "new autos bull case," it could also amount to an "old autos bear case" as legacy automakers like General Motors (GM) and Ford (F) will only face a more difficult competitive road in EVs "if Apple were to really throw its weight around and intensify competition," added Jonas.

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