Apple Poses No Fundamental Threat to Tesla, Says Loup Ventures

Image: Loup Ventures

A recent Reuters article that Apple is going to introduce a self-driving electric car in 2024 created a bit of buzz. This has undoubtedly attracted attention, as a company with a big name is about to compete in the market for autonomous driving and electric vehicles. Loup Ventures' Gene Munster shared his thoughts on the matter, and said Apple poses no fundamental threat to Tesla (NASDAQ: TSLA).

Referring to the approach to software licensing for traditional automakers, Munster writes that it is difficult to predict the realistic time frame for the implementation of Apple's plans. Nevertheless, the firm believes that this is possible within the next 10 years. That is why he is trying to figure out what this will mean for Tesla stock.

Munster writes that the firm believed that Apple is the biggest risk for TSLA stock. However, in the long term, Apple poses no fundamental threat to the company.

"For starters, we’ve long viewed Apple as the biggest risk to shares of TSLA; however, long-term, Apple does not pose a fundamental threat to the company."

Loup Ventures sees no major risk for Tesla if Apple releases a car. It all comes down to simple math. Electric vehicles now account for 3% of all vehicles sold. The firm expects that in five years the share of electric vehicles will approach 30% of all car sales. However, in five years, Tesla will occupy about 1/3 of the global electric vehicle market share, leaving 2/3 of the market up for grabs. This means that Apple Car will have more impact only on traditional car makers.

Munster writes that Apple Car is likely to put some pressure on TSLA shares in the near-term as Tesla investors integrate a new risk factor into their investment thesis. However, the anticipation for Apple's car is likely to level off in the coming months.

For years, Loup Ventures have been predicting that Apple will release a TV. This product would fit well within the company's roadmap, and Apple even hired people from the TV panel industry to prototype it. But, Munster admits that he was wrong. Apple has never done a TV, which proves the fact that, until there is a real finished product, you should not succumb to the emotional influence of announcing its possible appearance.

"In the end, I was wrong. Apple never did a TV. As talk of Apple Car gains momentum, I'm reminded of a valuable lesson I learned the hard way: just because Apple is working on a product doesn't mean it will see the light of day."

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