The Apple Inc. (AAPL) Car has been a delicious rumor in recent weeks and months, but now these murmurings seem to be coming to fruition. Apple has been linked with producing an electric car largely thanks to its apparent ties with Tesla (TSLA), and now the world’s leading electric car manufacturer has helped to solidify those rumors still further.

Tesla positive about Apple Car

During an earnings call, the CEO and founder of Tesla, Elon Musk, was asked about the looming threat of an Apple Car in the future. It is pretty obvious that if the world’s largest company in terms of market capitalization releases and an electric vehicle that this could have a significant impact on Tesla’s business model. But far from being concerned about this prospect, Musk replied that he actively hopes that Apple gets into the car business, and that this notion “would be great”.

One should not underestimate the potentially disruptive influence of Apple in the auto market. Apple has previously turned the mobile phone marketplace completely on its head with the release of the iPhone in 2007. Indeed, the smartphone from the consumer electronics giant is now so ubiquitous that it seems barely believable that he was only released for the first time a mere eight years ago.

While there would be significant challenges for Apple in releasing an electric car, the company certainly has the potential to move into such very diverse avenues. Unquestionably, Apple would face logistical issues in producing an electric car, but it seems that the reports which suggested that this could occur by the end of the decade are more accurate than some observers perhaps thought at the time.

Tesla cool on Apple staff poaching

During this public event, Musk also spoke about an issue which has perhaps initially precipitated the Apple Car rumors. Apple has poached numerous employees from Tesla, and it is thought that this is strongly linked to the desire of the corporation to manufacture is an electric vehicle. Musk previously conceded that Apple held direct talks with Tesla in 2014, but at the time dismissed the idea of an Apple buyout of Tesla.

However, Musk claimed that his company have managed to convince five times the number of Apple employees to join the car maker. Effectively, Musk considered the reporting of Apple poaching Tesla employees to be completely inaccurate. But this issue might give some clue as to why the CEO of the electric car pioneer is apparently not too concerned about the threat of Apple.

Apple-Tesla Links

The potential for Apple to enter the electric car market has been discussed for sometime, and whenever this topic has reared its head, Tesla’s name has inevitably come up as well. This is a pretty natural process considering that Tesla is the world’s largest manufacturer of electric cars, but there has been nonetheless a closer relationship between Apple and Tesla than one would associate between two rivals.

Aside from the staff poaching issues and the rumors of an Apple buyout of the electric car manufacturer, it has also been strongly asserted that Apple and Tesla could collaborate technologically. Tesla has made in-car technology a major selling point of its range of vehicles, and it is thought that Apple could look to strike some sort of deal with Tesla to be a major provider of in-the car entertainment systems and software.

Additionally, it has also been suggested that Apple is interested in manufacturing some sort of battery technology for electric vehicles, and that Tesla could be a major customer of such a product. Far from being threatened by a tie-in with Apple, Musk may instead view some sort of collaboration which would be a massive benefit to both corporations. After all, there is no particular reason why Apple should view Tesla as an immediate threat or rival. It could be very much in the interest of the California-based behemoth to work with Tesla to enhance its prospects in the electric car niche.

Apple Car to expand electric car marketplace

And this brings us neatly on to another point. Musk may not view Apple as a threat in the electric car market, and indeed may be enthusiastic about the prospect of an Apple Car being developed, as he recognizes that it could lead to the electric car market being catalyzed. Although Tesla is doubtless extremely proud of its position as the world’s largest electric car manufacturer, it would nonetheless probably be perfectly happy to settle for a small portion of a much larger pie. Musk may even be confident of eventually dominating a larger electric car market stimulated by Apple interest.

In many ways, the electric car market would seem to be a natural fit for Apple. The company is currently in the position of having $180 billion in cash reserves, and this could easily be invested in an electric car project. Additionally, an Apple Car is very much in line with the ethos of the company, with Apple always keen to emphasize its green credentials.

Production headaches

But one shouldn’t underestimate the logistical issues involved in producing an Apple Car. Apple has never produced any form of road vehicle at all, or ever engaged in any form of manufacturing remotely on the scale of that involved in vehicle design and production. Although Apple would be able to hire some of the greatest minds in the industry to work on the Apple Car, it doesn’t currently have the sort of manufacturing and the supply chain required to produce a major motor vehicle.

Additionally, in the consumer electronics marketplace, Apple is an acknowledged and renowned expert. It is almost inevitable that any device which Apple releases will sell extremely well, and the critical reception for these products is usually favorable. However, in the auto market, an Apple Car would not be able to draw upon this established cachet, and this is a notoriously competitive and exacting marketplace to be involved in. The car-reviewing press is similarly infamously harsh and demanding. Apple would need to produce something of real quality in order to even compete with Tesla, let alone more established gasoline-based cars.

This is certainly a story to keep an eye on for the time being, though, as it seems that the links between Tesla, Apple and an Apple Car will run and run. All someone needs to do now is create an electric car that does the same…