Apple Inc. (NASDAQ: AAPL) clearly failed to bring a competitive car to market, but that doesn’t mean the firm is giving up. Despite the conclusion in parts of Wall Street that Tesla Inc (NASDAQ: TSLA) has secured a monopoly, Apple appears to be doing its best to face off against the firm. As far as we know, Tim Cook is nowhere near releasing a product, but he’s hitting Tesla exactly where it could hurt the most.
Elon Musk’s firm’s future is based on the value of car sales far into the future. In order to drive demand, and margins, as promised a lot of technology improvements will be needed. In recent weeks we’ve found out that Apple is still studying self-driving AI. Now it seems that the firm is hitting Tesla even closer to home.
Apple works on batteries
Apple may have given up most of its car project, but the firm is still working on battery technology. According to a report, the firm is working with Contemporary Amperex Technology Limited on bleeding edge battery design. Shanghai-based Yicai Global authored the report on the development and it was relayed by MacRumors on Thursday.
We don’t know what the Apple Inc. (NASDAQ: AAPL) strategy is just yet, but the firm appears willing to part with millions of dollars for the research. The report, which cites unnamed sources and should be taken with a grain of salt, says that CAT plans to become a world leader in battery building.
The firm is, according to the report, set to compete with Tesla Inc (NASDAQ: TSLA) directly on battery charging speed and price. There is no info in the report on exactly what Apple is doing with the firm. There is also a dearth of information on Apple’s actual commitment to the project. We don’t know how much the firm is spending, or what kind of manpower it has involved.
Don’t expect tech to boost Apple stock
Apple stock, unlike that of Tesla, is based on forecasts on a relatively short timeline. Analysts care how many iPhones Tim Cook will be able to sell this year and the next. Speculation about future tech doesn’t do much to move the stock price.
That means that until Apple Inc. (NASDAQ: AAPL) is coming close to an actual product, its battery tech isn’t going to be considered by Wall Street. For Tesla, however, the opposite tends to be true. The firm is valued based on longer-term projections of its profitability. These longer term projections will rely on technology development.
The most optimistic Tesla stock targets on Wall Street rely on projections that the firm will be close to a monopoly in the EV market.
If the Yicai Global report is correct, Elon Musk’s firm will have plenty of competition on battery quality. That could mean a fall in margins because of greater competition.
Tesla Inc (NASDAQ: TSLA) stock has been falling for the last month based on worries about demand for its cars. If EVs become a commodity sooner rather than later, the small market could become even less profitable.
Tesla stock value is based on the idea that big earnings are just around the corner. Apple, however, appears to be trying to break that story down with its battery experiments. That could be a big risk for the Silicon Valley carmaker going forward.