The Apple Car and Reality

November 24th, 2015

This may come as a surprise to some of you, particularly if you’ve purchased a new car in recent years in the U.S. But the average age of a car on the road is 11.5 years. That means that it would be a 2003 or 2004 model, such as the VW Passat GLX I once owned. To me that would be a pretty old car, ready for retirement, but I suppose I’m out of touch.

Indeed, Chris O’Brien, my co-host on The Paracast, the other day bemoaned the fact that he has a 10-year-old car, but that’s not at all unusual. Now if the vehicle is in a pretty good state of repair, you can probably get a great deal if you decide to buy one of those cars, since depreciation is no longer much of a factor in the purchase price. Indeed a key reason that cars hang on that long without breaking down is due to improved reliability. It’s no longer unusual for vehicles to deliver far more than 100,000 miles of relatively trouble-free service.

If you catch a new car ad on radio or TV, however, you’d think people are lining up to take advantage of all those zero down, zero interest auto loans, but those offers are only available to the few who have great credit. Either way, there are still millions of potential customers out there.

But what will you buy if you’re in the market for a new car? Or are you prepared to wait a few more years driving the old clunker just to see what the next generation of motor vehicles will be like? By 2020, for example, you might be able to buy a car with autonomous driving, which means the vehicle’s onboard computers and sensors will take over the entire driving experience, from origin to destination, without your direct intervention. Some of today’s cars have taken halting steps towards that goal with smart cruise control and braking, and lane change warnings. Add to that the ability to assist in parallel parking, or taking over the entire experience without your intervention, and you wonder whether the driver will eventually be obsolete.

We know that Google is working on a self-driving vehicle. Some of them are on the road, and  you’ve probably heard about the incident in which one of those cars was stopped by police — for driving too slowly. In addition, Tesla recently introduced a software update for the Model S that includes Autopilot. Again, this is a first step, and it allows you to take advantage of an advanced cruise control scheme that will let you drive long distances on a highway without direct intervention until you reach the off ramp. But until this scheme is proven, I wouldn’t trust it, and would treat it as just another cruise control setting, which means you should be ready to take over at a moment’s notice.

Tesla is reportedly going to add more self-driving features over the next few years. At least Tesla has a shipping product that garners great reviews, although the record for reliability is not very promising. That would appear to be a major obstacle towards relying on it for anything more than a regular driving experience.

I’m not at all certain there will be a self-driving car with a Google label on it. Maybe the technology will be available for custom manufacturing by a third party, or licensing to existing auto makers.

As to Apple, there have been rumors in the past year or so about Project Titan, which supposedly involves developing a self-driving electric vehicle that is being called Apple Car. Or is a hydrogen fuel cell a possibility?

While I have little doubt Apple is working on something automative, this doesn’t mean you’ll be able to buy an Apple Car by 2019 or 2020. It may be more about developing test beds to explore onboard management and infotainment systems for future versions of CarPlay. Maybe Apple wants to build what they regard as the ideal vehicle in which their hardware and software can be fully tested. But if that’s the case, they could purchase a sampling of cars from different makers to get a direct handle on how their technology would work in the real world.

Sure, it may be true that Apple is testing the waters to see if building a car makes sense. Prototypes of different designs might be built and road tested, which means it’ll be difficult to keep them hidden. Yes, I know about prototype vehicles being covered up to prevent identification of the actual design, but an Apple Car, if real, will eventually be spotted on the road. You can’t do all the testing on race tracks.

At the end of the day, Apple might still decide not to manufacture such a vehicle. Maybe it’ll be done in partnership with one of the existing auto makers, perhaps BMW, which is one of the rumors. Certainly it’s one thing to build a few prototypes and try them out. It’s another thing to commit to production, because that creates its own problems. Would Apple use an existing manufacturing facility, perhaps leasing a plant that is underutilized or has been shut down? Or would they construct one from scratch?

Tesla’s production facility, in Fremont, CA, is a plant that was once used in a joint venture between GM and Toyota that was formerly known as New United Motor Manufacturing, Inc.

Even if Apple redeploys a car plant, or builds one of their own, establishing a sales and servicing system would be a huge undertaking. Tesla sells direct. I suspect Apple would as well, particularly in light of the problems they had with third party dealers until the Apple Store chain was established.

And obviously you wouldn’t buy an Apple Car at an Apple Store.

If Apple could keep the purchase price to a reasonable level, car buyers would have something to look forward to. You can bet Apple will want to overhaul the current convoluted and frustrating purchase experience. Just eliminating that annoying visit to the finance department would be a great step in the right direction.

At the end of the day, nothing is final. When and if Apple submits vehicles for testing by the appropriate regulatory authorities, you’ll be reasonably assured it’s real. But we’re not there yet, not by a long shot.

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