Arnold Frisch, writing for Seeking Alpha [Free reg-wall]:
Toyota put the first Prius vehicles on sale in Japan in 1997. Since then, including all of the Prius varieties, they have sold 5,300,000 vehicles for approximately $115 billion. This does not include the hybrid Camry and the Toyota and Lexus SUVs. But it took them seven years before they were able to break the barrier and sell 126,000 cars in 2004 (for about $2.8 billion).
And:
Tesla delivered their sports car starting in 2008 and continued deliveries until 2012 when they introduced the Model S. There were only 2,500 sports cars delivered (at $100,000+ each) and the Model S volume was at 75,000 in June 2015 (at an average price of about $85,000). Tesla’s total vehicle sales as of June 2015 were around $6.6 billion. However, they have just started to deliver their SUV and low-cost vehicles are scheduled for delivery starting next year. They also have gone into a sideline, selling battery storage systems for solar collectors. I reference a very good review of the latest variant of the Model S.
So, it took seven years after introduction for Toyota to get into the billion-dollar per year club, and it also took Tesla about seven years.
And:
But there is no argument over the fact that neither Toyota nor Tesla made any money at this for at least six or seven years.
Apple committed to about four years of development work involving 1,800 people – probably at a cost approaching $2 billion per year.
The math is certainly not exact, but if indeed Apple is intent on building, shipping, and selling a vehicle in 2019, it could be (adds seven years in his head) 2026 before they sell enough vehicles to cover their yearly costs.
On a side note, if you tap over to the Prius Wikipedia page, scroll about halfway down, you’ll see the year-by-year worldwide Prius sales numbers. This is, obviously, a very small sample size and a different era, but it is interesting to see these two examples to get even the slightest taste of what’s in store for Apple’s rumored vehicle.
Why do we spend time reading and analyzing this type of make-believe analysis based on rumors? It’s standard formula:
(Tangentially relevant facts and figures) x (Unfounded rumors or self-serving premise) = Clickbait irresistible to those who agree or disagree.
This works particularly well for celebrity news or Apple news.
Oh man, where is the “like” button??
Currently, autos is a low margin industry. Apple has always pursued high margin opportunities. To make high-margin cars, Apple would either have to dramatically lower costs, or dramatically raise the selling price, or both. Car-making is already highly automated so dramatic cost reductions seem…fanciful. Can Apple sell at dramatically higher prices? Only if there is an iPhone-ish value proposition. (The iPhone being a computer-in-your-pocket.) No one has offered the slightest hint as to a similar-scale value proposition for an Apple car. I’ll believe it when I see it.
What terrible analysis in the linked article
The like button is that caret-looking thing on the far left of the row with “Reply”.
I agree completely, and believe Apple is working on car embedded systems for actual carmakers to put in cars, not building cars.
Much like Apple is not going to sell “a TV”, just the AppleTV settop box.
Comparing what is out there now and what Apple might bring to the table if it decided to produce commercially available electric vehicle: Innovative battery technology, precision manufacturing and efficiency, brand lock-in and green credentials. Possibly tax incentives. I can see them making the jump.
Even if all allegations are true – i.e. Apple is designing a car with thousands of engineers working on it, the notion that Apple will fail to profit like other companies is not supported by history or current economics. Case in point: No one is making a profit in smartphones while Apple can’t build banks fast enough to hoard the cash. One valid argument, but not made in the article, is that cars are not a product many consumers will replace every year or even every 3 years. Massively successful Apple products almost always rely on a growing customer base buying in every 2 (iPhone) or 3 years (Macs).