How Apple making cars possibly effect Tesla
1 min read . Updated: 23 Dec 2020, 09:04 AM ISTIt could well be the clash of two mega giants as Apple reportedly plans to roll out its first-ever passenger vehicle to take on the might of Tesla.
- Apple car could debut as soon as 2024 although the tech giant is keeping all details under wrap.
Apple Inc.’s reported foray into making its own self-driving, electric cars creates “a new Tesla bear case," according to analysts at Morgan Stanley.
Tesla Inc. shares fell as much as 5.5% Tuesday, adding to their 6.5% drop on Monday, after Reuters reported that Apple is moving forward with autonomous technology and aims to produce a passenger vehicle by 2024 that could include its own battery design.
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Tesla’s two-day slump also follows its admission into the benchmark S&P 500 Index before the open on Monday.
“Apple’s potential entry into autos represents perhaps the most credible/formidable bear case for Tesla’s stock that investors have had to consider for some time," analysts led by Adam Jonas wrote in a note Tuesday. Jonas gives Tesla a buy-equivalent rating with a $540 price target, about 15% below where it’s trading currently.
(Also read: Elon Musk says Apple CEO had refused to meet him over Tesla sale)
The iPhone maker getting into the vehicle market could also pose a threat to legacy automakers like General Motors Co. and Ford Motor Co., which will have a hard time competing if “Apple were to really throw its weight around," Jonas said.
For suppliers of electric, autonomous and connected-car systems, meanwhile, Apple’s plans “could very likely mean a significant inflection in the speed and magnitude of a wide range of investments," he added. Lidar suppliers include Luminar Technologies Inc. and Velodyne Lidar Inc. rallied Monday after the report and continued to rise Tuesday.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.