Tesla RoadsterSource: Tesla

What you need to know

  • Gene Munster believes that an actual Apple Car is a certainty now.
  • The analyst also believes that Apple would be the biggest threat to Tesla.

As reported by CNET, Gene Munster, co-founder and managing partner of Loup Ventures, believes that the argument between an actual Apple Car or the company licensing the underlying software is over. The analyst says that, while it was not clear six months ago, it is now that Apple will build an actual car.

"I think it's important to make a distinction between when Apple works on something compared to when it sees the light of day," says Gene Munster, co-founder and managing partner of Loup Ventures and a keen watcher of Apple and its automotive doppelganger, Tesla. "It's very clear Apple has ambitions to build a car. It was not clear six months ago."

When asked why Apple would wade into the automotive business, Munster echoed the same reasons shared by Katy Huberty at JP Morgan, saying that it was all about the size of potential market share in an industry that was ripe for innovation.

Why would Apple want to get into the car business, an industry known for chewing through capital, often returning slim and uneven profits and generally hemmed in by federal regulations on one side and state dealer franchise laws on the other? "The addressable market," says Munster without missing a beat. "It's orders of magnitude larger than anything Apple's gone after before. What keeps tech companies awake at night is growth."

Taycan Carplay LayoutSource: Ted Kritsonis / iMore

In fact, Munster believes that Apple may be the biggest threat that Tesla could face, despite dozens of other major automakers and startups getting into the electric vehicle business.

Munster suspects that Apple would easily hurt traditional automakers, facing its only really interesting battle in its own backyard. "I think Apple is the biggest competitive risk that Tesla (will) face." The two have been the object of merger speculation, but Munster thinks a merger could never work as each is unrelenting when it comes to control of any product with their name on it.

After talks reportedly broke down between Apple and Hyundai/Kia, some now believe that the most likely partner for Apple on an electric vehicle is Nissan.