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An Apple advantage in making an Apple Car: it can make the vehicle’s chips

The pictured Apple Car concept is courtesy of Vanarama.

There’s a part of me that’s still dubious that Apple will take on full responsibility for making an Apple Car. I think it’s more likely that Apple will partner with a current auto manufacturer to produce an Apple-branded vehicle.

Many other pundits disagree. If Apple is indeed manufacturing an Apple Car, it could be in a very good position to do so, at least in one area: making automotive chips.

An Apple Car and Apple chips

By 2025, chip shortages and trends such as electrification and autonomy will drive 50% of the top 10 automotive original equipment manufacturers (OEMs) to design their own chips, according to Gartner, Inc. As a result, it will give them control over their product roadmap and supply chains, adds the research group

“Automotive semiconductor supply chains are complex,” said Gaurav Gupta, research vice president at Gartner. “In most cases, chip makers are traditionally Tier 3 or Tier 4 suppliers to automakers, which means it usually takes a while until they adapt to the changes affecting automotive market demand. This lack of visibility in the supply chain has increased automotive OEMs [original equipment manufacturers] desire to have greater control over their semiconductor supply.”

In addition, the on-going chip shortage is primarily with mature semiconductor technology node devices that are fabricated on smaller 8-inch wafers, where capacity expansion is difficult. “The fact that the automotive industry has been conservative in qualifying older devices on larger wafer sizes has also hurt them and will likely motivate them to take chip design in-house,” said Gupta.

Apple makes its own chips for the Mac, iPhone, iPad, Apple Watch, and other devices. Building its own processors for vehicles doesn’t seem like too much of a stretch.

Gartner also predicts that by 2025, the average sale price of new vehicles will exceed $50,000 in the U.S. and Germany, leading to greater repair and upfit of older vehicles. 

Sounds about right? And if/when an Apple Car rolls out, you can bet it will be expensive.

“This price acceleration will likely shrink the overall number of sales of vehicles and increase the market for parts and upgrades as people seek to keep existing vehicles on the road longer,” says Mike Ramsey, research vice president at Gartner.

Gartner analysts anticipate that the market for new vehicles will remain flat or even decline in the face of rising prices. Meanwhile, automakers will push new services and even upgrades of equipment and computers to extend the lives of existing vehicles.

When might we see an Apple Car?

On. Nov. 18, Bloomberg reported that Apple is accelerating development on its “Apple Car.” The article says the electric vehicle will be self-driving and could roll out in 2025. 

What’s more, in a note to clients — as noted by AppleInsider — investment bank Wedbush says Apple is likely to announce a strategic electric vehicle partnership in 2022 to lay the groundwork for an “Apple Car” release in 2025.

Dennis Sellers
the authorDennis Sellers
Dennis Sellers is the editor/publisher of Apple World Today. He’s been an “Apple journalist” since 1995 (starting with the first big Apple news site, MacCentral). He loves to read, run, play sports, and watch movies.