There is nothing to suggest Apple will be successful in the electric car business, according to one former GM Vice Chairman. Bob Lutz insists no vehicle manufacturer has made a nickel on electric cars so far, and that Apple shareholders should be concerned about the company’s proposed move into this business.
“If I were a shareholder I’d be very upset,” Lutz told CNBC. “They [Apple] are currently engaged in a very high-margin business. The automobile business, at best, is a very low-margin business. And you can’t show me one company in the world that, to date, has made a nickel on electric cars.”
Lutz added that the only reason manufacturers are making electric cars is to comply with U.S. and European fuel economy regulations. He also pointed out that Apple has, at least in his eyes, nothing to bring to the electric car business that would differentiate it from others.
“Apple has no expertise in batteries,” Lutz said. “When it comes to actually making cars, there is no reason to assume that Apple, with no experience, will suddenly do a better job than General Motors, Ford, Volkswagen, Toyota, or Hyundai. So I think this is going to be a gigantic money pit.”
Daring Fireball’s John Gruber compares this statement with the criticism Apple received from smartphone makers before it launched the iPhone. “PC guys are not going to just figure this out,” insisted former Palm CEO Ed Colligan in November 2006. “They’re not going to just walk in.”
Two months after Colligan made those comments, Apple announced the original iPhone at Macworld, and in June of 2007 the device went on sale for the first time. We all know what happened after that.
Lutz also said that “it doesn’t matter” if Apple “burns $30 to $40 billion in the car business” because the company has “an embarrassment of riches” and doesn’t know where to put its money. He concluded that if he were a board member at Apple, he would “ask some serious questions about this whole thing.”
Lutz’ comments come just after The Wall Street Journal reported that the Apple Car is now a “committed project” and that
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