How Can Apple Possibly Compete with the Tesla Model 3?

| Particle Debris

If Apple really is planning to sell an electric car in 2019-2020, the company now has its work cut out for it. Yesterday, Tesla's CEO Elon Musk introduced the Model 3 in Hawthorne, CA. This next generation electric car will go into production in 2017, have a range of just over 200 miles, and the price will start at US$35,000. However, expected accessories will raise the price several thousand dollars.

Image credit: Reuters, Tesla

The lower price is enabled by economies of scale. Reuters reports:

Tesla says scale from the massive facility [nearing completion in Nevada] will cut the cost of its battery pack by 30 percent to enable the lower-priced vehicle.

A boatload of people stood in line yesterday to pre-order, coughing up $1,000 to pre-order a Model 3, sight unseen in many cases. CNBC wrote:

Tesla CEO Elon Musk said the company received 198,000 Model 3 orders in 24 hours. In a tweet Friday, he touted a 'bright' future for electric cars.

About half of those 200,000 pre-orders are expected to convert into a final sale. Even so, Tesla will be pressed hard to deliver all the pre-orders, according to the above reports.

The Model 3 forms the basis of Tesla's goal to sell 500,000 cars per year by the year 2020, the year Apple is expected to start shipping. (If rumors about Apple's "Titan" project are to be believed.)

Heretofore, electric cars have constituted about 1.4 percent of all new car sales in the U.S. Factors that have kept sales from taking off for pure electrics include limited range in most models and associated "range anxiety" which means fear of depleting the battery and getting stranded, the availability of charging stations and the added cost of the batteries.

Tesla will have competition not from Apple in four years, but from GM's Chevy Bolt this year. The Bolt will be similarly priced and have a similar range. Also, I expect the already modestly popular Nissan Leaf to up its game and better compete with Tesla and GM.

All in all, it looks like the pure electric car has arrived. Other car manufacturers, who were in planning stages or had first generation vehicles like the BMW i3, are probably more alarmed now than they were last week.

Tesla has built a strong brand, has garnered much public enthusiasm with its new technologies like Autopilot and Ludicrous mode, and has been stealing the news cycles more than any other car company. Some other car companies will move into a higher gear and some will try to rationalize their cautious efforts.

But with Tesla, today, it's game on. No pressure, Apple.

Next page: The Tech News Debris for the Week of March 28th. Apple needs to become its own bank.

Popular TMO Stories


Lee Dronick

  How Can Apple Possibly Compete with the Tesla Model 3?

Features, range, price


Range of mileage…

Or virtually any other features/spec, or distinguishing mark


Tesla seems to have well done products.
Price seems right and I am in the market next year for a new car.
Might give it a whirl.


I don’t know. I just keep thinking of another car that was going to ship hundreds of thousands each year. It was cool, had a CEO that was legendary, and was going to turn the automotive world on its ear with revolutionary technology. It was DeLorian and we all know how that turned out. It’s one thing to turn out a handful of luxury cars and quite another to mass produce cars for the masses. I’m going to keep my 2005 Prius for at least another decade, then we’ll see what the market looks like.

Lee Dronick

Remember, we don’t know the details the Apple Car or if indeed there is one.


Still not buying a pure electric until it packs fuel cells rather than batteries.


They are getting closer with all electric cars. There is a long way to go.
1. Range of full charge and time to recharge still have a ways to go for anything but daily commutes. What affect does AC/Heat and electronic usage have on range?
2. Useful lifespan and cost of battery replacement are questions I would have. If range of vehicle decreases with use, your 200 mile car becomes less useful over time. This is not much of an issue with gas engines. If the cost of battery replacement is several thousands of dollars every few years then it will become painful to one’s budget. Remember this has to make sense to masses of buyers.
3. The cost of fuel is another issue. The way prices have fallen on petroleum I am not sure there is still much of an economic incentive for electric vehicles. The more electric cars there are the more demand on the power grid (much of it from coal in the US) and less demand on oil. Without more nuclear power electric plants this still will be an issue. There are other sources of power generation. Some that don’t appeal to me much (wind, solar) because of their impact on the land. Others like ocean tides and geothermal aren’t close to being used today.


FWIW I have my 2005 Prius and the battery pack is just fine. I still get the same milage I did when the car was new which says to me that it hasn’t lost any range. In fact there are cab companies around here that are running far older Prius’s with vastly more miles and have had no problem. I believe Toyota is still saying they’ve never had to replace a battery because it wore out.

Lee Dronick

Geoduck, what is or was the warranty on the battery?


Battery life and its impact on the value of an aging EV is my concern. For example, my 2003 Honda CRV ( at 13 years old ) is still going strong with no major costs and just standard maintenance. I expect it is still good for another several years of service. I’m not aware of any EV battery technology delivering that many years of service without loss of range.

Don’t get me wrong, I love the positives EVs bring but some of negatives will keep the masses away. btw: it’s not clear to me that a $35k EV ( once the Federal rebate expires ) price is low enough for the “masses”.

Lee Dronick
Lee Dronick

  Battery life and its impact on the value of an aging EV is my concern

I am more concerned about the Apple Car’s soldered in RAM


I believe the battery is currently covered under the drivetrain 8 year 100k mile coverage. I’m not sure if it was any different when I got my Prius. I honestly don’t have that paperwork any more.


Apple needs a battery tech that is twice as good (which can also be used in phones, etc) along with style that’s as good as others. Then security and integration with iOS devices…

Lee Dronick

I did a Bing search and from what see the Prius battery warranty is 8 years or 100,000 miles, but many are lasting quite a bit longer. Replacement price is about $2,500

Lee Dronick

10 year warranty in California


I did a Bing search and from what see the Prius battery warranty is 8 years or 100,000 miles, but many are lasting quite a bit longer. Replacement price is about $2,500

Thanks Lee, good to know even though my focus is EVs and not hybrids. No evidence to support this theory but I’d expect an EV using batteries 100% of the operational time negatively impacts battery life more than a gas-electric hybrid . The Nissan Leaf warranty ( IIRC ) is 8 years.


Lee wrote in response to how Apple can compete:

Features, range, price

Maybe the first two, but if their other products are any indication, Apple won’t compete on price. However, it does raise an interesting point: Tesla already dominates the upscale EV market where Apple typically likes to land with its products; it should be interesting to see their strategy.


Probably just produce a hatchback. The trunk opening on the Model 3 is bordering on useless. What a dumb idea to build another sedan when traditional carmakers are starting to think about eliminating the sedan design (see Chrysler and its 200).

Making an EV for the masses means it has to come in under $25k US and still carry a family of four with a stroller.

They could always just buy Tesla too.


<quote>Making an EV for the masses means it has to come in under $25k US and still carry a family of four with a stroller.</quote>

Remember that Google’s strategy is probably to make something more like an autonomous taxi service. Apple could go the same route and then not *have* to sell to the masses.

While I still like the idea of car ownership, I could easily see a future where I only need one car, for long family vacations and camping trips where the transportation infrastructure is not as good, but I could use self-driving electric Apple or Google cabs to get to work. These cabs would be available when *I* want them to be, no running to catch the bus which won’t come again for another hour, and would travel directly to where *I* want, no going towards downtown first to make a 15 min drive take an hour. It would be very convenient to not have to find a parking place everyday.


I think the benefits and practicality of on-demand or ride-sharing cars is being over-estimated.  Advocates are saying that privately owned cars spend most of its useful life parked somewhere and see an opportunity in farming out your parked time into conveyance time for other people.  This is a terrific opportunity if people’s schedules, especially their on-the-road times, are staggered throughout the day.  But they aren’t.  Morning and evening commutes and the lunch break are on-the-road hours and if society deploys a fleet of on-demand cars large enough to serve these hours, most of that fleet will still park idle the rest of the day.

If we really want to make a dent on the resource drain of mass car ownership, the solution is already available:  build denser, expand public transit, and walk & bike more.


Sorry, correction:  “Morning and evening commutes and the lunch break are PEAK on-the-road hours. . . “

Paul Rubin

It’s going to take Tesla at a minimum a year to get some of these Model 3’s into the hands of meaningful numbers of owners. Probably 2-3 years to address the likely half million customers who might pre-order. And we all know Apple likes to let others get a 18 month to 3 year head start to figure out what customers want and what problems crop up and THEN they go in for the kill. A lot of these orders will get canceled as people begin to realize just how few charging stations there really are, how long supercharging takes, let alone regular charging, and the cost of upgrading one’s electrical panel to accommodate it. Plus the longer gas prices stay relatively low, the more complications there are for alternative fuel sources. Tesla desperately needs to partner up with a large national chain and get chargers in place at a good 10x the current numbers. EV’s are really still at the very beginning of this transition and that assumes Hydrogen Fuel Cell or something else doesn’t swoop in.


FlipFriddle wrote:

Making an EV for the masses means it has to come in under $25k

The typical counter is the Federal rebate reduces the price by $7,500. The problem is Tesla will probably be over the 200,000 vehicle limit before Model 3s are in production in late 2017 ( and that assumes an unprecedented on-time delivery by Tesla ).

and also commented:

They could always just buy Tesla too

Apple and Tesla talked many months ago but according to Musk there is no agreement. As Tesla approaches a market cap of almost $33 billion, an Apple purchase seems unlikely.


Paul Rubin wrote:

EV’s are really still at the very beginning of this transition and that assumes Hydrogen Fuel Cell or something else doesn’t swoop in

IIRC, fuel cell re-fueling infrastructure is substantially less prevalent than electric charging, so chances it would “swoop in” seem unlikely at least in the immediate future. Longer-term, fuel cell and other technologies may overtake electric but there are too many factors involved to predict even at a macro level.


I hope Tesla succeeds in delivering all these promised vehicles ( they’re still working on Model X deliveries ).

IMO Tesla provides two somethings that aren’t mentioned much and the Leafs/Bolts etc. do not, IMO, provide:

(1) an attractive vehicle whose form is just as important as its function
(2) Standard-sized vehicles that give me confidence they will protect me in a collision.


As amazing as Teslas are, when you drive in them, you still feel like you are in a car. The thing that could change that which would be transformational for the automotive industry is a full mechatronic suspension system that goes beyond the active suspensions on some vehicles.  This would be better than the gyro system that stabilizes the turret on an M-1 tank. Such a system if operating using a 1000 hZ class controller could map the road ahead of the vehicle at cm accuracy taking out all the bumps with robotic control of the wheels linkages and could bank the car left and right and for and aft to take out the feeling of turning, acceleration, and braking movements.  The resulting ride smoothness would feel like you are sitting in your living room. The first car company that implements this will own automotive luxury.

Lee Dronick

Joel, something like Citroën developed way back when, but with prediction?


Not really. The technology for digital control systems that are fast enough to do what I am talking about have only really been feasible in the past few years.  The wheel control system on Teslas is one example of the speed of controllers I am talking about but I am suggesting a much harder problem.  It would be a big R&D effort to productize what I am talking about but it would be a breakthrough in automotive comfort. 

Log in to comment (TMO, Twitter or Facebook) or Register for a TMO account