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Apple car/taxi won't kill other EV, autonomous vehicles makers - Wedbush's Dan Ives

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Editor's Notes:

Wedbush Securities managing director Dan Ives

  • Wedbush Securities managing director Dan Ives said Friday that the introduction of an autonomous car from Apple wouldn't necessarily become a "killer" for the incumbent players in the electric vehicle space.
  • Speaking to Bloomberg TV, Ives argued that there will be such enormous growth within the EV and autonomous vehicle spaces that many companies will be able to thrive in the sectors.
  • "It's not a zero-sum game," he said, adding that Apple's entry into the space "is a matter of when and not if."
  • Bloomberg reported earlier this week that Apple (AAPL) had stepped up its efforts to build a self-driving car, with a goal of producing the product by 2025.
  • Despite the potential entry by a massive competitor, Ives remains bullish on Tesla and sees an opportunity for legacy car makers as well, like General Motors , Ford and Volkswagen (OTCPK:VWAGY).
  • He added that Apple (AAPL) could partner with a legacy producer to bring its offering to scale.
  • Asked about the impact the recently passed infrastructure bill will have on the EV business, Ives called the legislation a "watershed event."
  • He noted that building out the charging infrastructure will be crucial for supporting growth in the EV sector. Ives added that he sees 25% of the U.S. car market being EVs by 2030.
  • While Ives believes the major EV players will thrive despite AAPL's move into the high-tech vehicle market, Morgan Stanley has a different view. See why the firm thinks AAPL will play a spoiler role for the industry.

Apple's potential autonomous car is called the ultimate EV bear case by Morgan Stanley

Nov. 19, 2021; Apple Inc. (AAPL)

  • Morgan Stanley thinks the interest in Apple (NASDAQ:AAPL) in entering the electric shared-autonomy space in transportation has been accelerated by the soaring valuation of Tesla (NASDAQ:TSLA) and other EV stocks in a validation of the wealth creation potential.
  • However, analyst Adam Jonas and team do not think Apple (AAPL) will bring a car to the market in the traditional sense.
  • "We believe a car without steering wheel or pedals must be a 'shared service' and not an 'owned car,' To be clear, we do not believe consumers will own title to a fully autonomous car... but will engage in the service as a subscription or transport utility."
  • Jonas and team also think the Apple (AAPL) autonomous car story will play out slowly.
  • "We expect L5 (fully autonomous) vehicle penetration to ramp very slowly due to a host of technological and moral/legal/regulatory considerations. By FY25 we forecast L5 fully autonomous vehicle sales to be roughly 100k units with the vast majority being outside of the US. By 2030, we forecast L5 sales to surpass 1.8mm units (2% penetration of sales), 0.4% of the global car park and 0.5% of global miles traveled. By 2040 we forecast L5 penetration to reach 7.6% of global miles traveled. By 2050 we forecast L5 to approach 47% of miles traveled."
  • The overall view from Morgan Stanley is that a potential entry by Apple (AAPL) into the autonomous-mobility market is a clear negative for much of its automotive coverage, which includes companies ranging from Aptiv (NYSE:APTV), BorgWarner (NYSE:BWA), AutoNation (NYSE:AN), Carvana (NYSE:CVNA), Fisker (NYSE:FSR), QuantumScape (NYSE:QS), Ferrari (NYSE:RACE), Lucid Group (NASDAQ:LCID), Avis Budget (NASDAQ:CAR), REE Automotive (NASDAQ:REE) to General Motors (NYSE:GM).
  • Read: Apple might build an autonomous car. Who gets the call to be a partner?