Will Apple Join the Self-Driving Car Race?

Apple is planning to put an electric car on the market by 2020. No, Apple is planning to build a self-driving car. No, it’s not. It would be stupid to do so.

Rumors about Apple, which has the highest market capitalization of any company in the world, are an industry in itself, so the rumor world was thrilled to learn that Apple had leased a modest Dodge Caravan and was driving it around Silicon Valley festooned with cameras, Lidar, and other devices.

Meanwhile, Apple has hired hundreds of auto engineers away from Tesla, General Motors, Ford, and other companies with the goal of putting as many as 1,000 of them to work on the so-called Apple Car. (Ironically, less than a month after being fined more than $100 million for agreeing not to poach employees from Google, Adobe, and Intel, Apple is being sued by battery maker A123 for allegedly poaching its experts.)

We also know that Apple has $178 billion in cash on hand, which (even after adjusting for inflation) is vastly more than Tucker, Kaiser, Delorean, and other post-war American companies that have attempted to start manufacturing cars. (Elon Musk, the owner of Tesla, is worth about $12 billion.) With one of the most successful industrial designers in the world on its staff, Apple could be a real contender in the auto world, where success is heavily dependent on design.

Apple doesn’t manufacture its own computers or iPhones, so it seems unlikely that it would get into a manufacturing-intensive business with low profit margins. Even if Apple currently intends only to design an electric car, any car on the market after 2020 will have to have self-driving capability in order to compete. Given U.S. sales of more than 15 million cars a year, and worldwide sales of more than 80 million, Apple’s more likely market would be to compete with Google in the self-driving software business.

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Although several auto makers are developing their own self-driving software, many are hesitating. The above demonstration by Hyundai shows cars steering, accelerating, and braking themselves. But it is followed by a warning that these features may not be available everywhere. In particular, in the United States, the self-steering feature is designed to turn off after 15 seconds, while “for this film,” it was “modified not to turn off.” The 15-second limit is due to manufacture fears about product liability.

Google’s plan is to take advantage of that fear, allowing auto makers to provide the hardware while it provides the software (and accepts the liability), similar to Android phones and tablets. Apple tends to want to control both hardware and software, but whether it provides the hardware or not, it will have to include self-driving capabilities or let others capture the software market.

Meanwhile, Britain is experimenting with a variety of self-driving cars in various cities. Why isn’t the U.S. doing similar experiments? The short answer is that European regulation is so strict that it is much more difficult for private companies to test self-driving cars.

By comparison, in most American states, anyone can test their self-driving car so long as a licensed driver is ready to take over when necessary. In addition, California and a few other states allow for fully driverless experiments, which is why Bosch, Continental, and a few other European companies are conducting tests in the states. The fact that Apple hasn’t yet applied for a self-driving car license, like these other companies have done, only indicates that it isn’t as far along in its testing.

As a Macintosh enthusiast since 1985, I’d like to think that Apple is planning a self-driving car. But even if it isn’t, between Google, Bosch, Continental, Volkswagen, Mercedes, BMW, and other companies that are working on it, there will be plenty of choices for people in the future.

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About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

2 Responses to Will Apple Join the Self-Driving Car Race?

  1. Jardinero1 says:

    But will there ever be a self-driving Mega-Bus?

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