Apple Inc. (NASDAQ: AAPL) got a lecture on Wednesday on what it takes to become, and remain, an automobile manufacturer. The lecture was delivered by Toyota Motor Corp. (NYSE: TM) President Akio Toyoda in his role as chairperson of the Japan Automobile Manufacturers Association.
“Anyone can make a car if they have the technical ability, but, once they make a car, I hope they’ll recognize they have to steel themselves for 40 years of responding to customers and to various changes,” Toyoda is quoted by The Wall Street Journal as having said. Perhaps he didn’t know that Apple began trading publicly in December of 1980, more than 40 years ago, and just a few years after Toyota’s own debut on the New York Stock Exchange. Toyota began trading publicly in Japan in 1949.
Perhaps Toyoda could talk about why his company has yet to produce an all-electric vehicle (EV). Toyota introduced its hybrid Prius in Japan in 1997 and has been developing and selling a few hydrogen fuel cell cars since late 2014. There were even reports in 2016 that Toyota was going to begin developing EVs that would be ready for market in 2020.
Last December, a Toyota executive said that the company plans to sell 5.5 million electrified vehicles (including hybrids, plug-in hybrids and EVs) annually by 2025. Included in that stable of electrified vehicles is an EV that uses a solid-state battery pack sometime before 2025.
According to a report in Car and Driver, an executive with Toyota Europe explained the company’s long delay in entering the EV market to the success of the Prius: “[H]ybrid has given us the foundation we need, for other electrified powertrains – which will be introduced when the time, the market, and the infrastructure are right. And that time is getting closer.” At least it’s unlikely to be another 30 years.
Apple’s sin, according to Toyoda, is that it doesn’t understand the car business and that it will have to pay its dues for 40 more years before it can be accepted into the automakers club. It would be cheaper and quicker for Apple just to buy GM and change its name to Apple Motors.
Toyoda and his company are counting on Apple being unable to find a manufacturing partner, the same way it did for its iPhone and other products. Yet, Apple’s iPhone manufacturing partner, Foxconn, has already agreed to manufacture EVs for a Chinese partner and could still do the same thing for Apple.
What Apple would like to have happen is a carbon copy of the iPhone master plan: Apple designs the product and then sources components and manufacturing from third-party vendors. That’s where Toyoda thinks existing carmakers have an angle if they choose to pursue it. Toyoda’s remarks, The Wall Street Journal noted, indicate that the auto industry does not support an arrangement with Apple that would shift long-term risk away from Apple and onto the carmakers.