Apple Analyst: Cupertino's EV Ambitions Could Play Out With Partnership With Tesla, Chinese EV Brands

Rumors of an iCar from Apple Inc AAPL are gaining momentum.

Against this backdrop, an analyst at Wedbush discussed at length the firm's perspective on Cupertino's electric vehicle ambitions.

The Apple Analyst: Daniel Ives has an Outperform rating on Apple with a $160 price target. 

The Apple Thesis: Apple's EV ambitions have seen many twists and turns over the last six years, having been significantly scaled down from an initial ramp a few years ago to regaining prominence now following reports of a possible 2024 Apple car unveiling, Ives said in a Wednesday note.

The probability of Apple unveiling its own standalone car by 2024 is 35%-40% given the Herculean-like auto production requirements involved, battery technology ramp, financial model implications and regulatory hurdles, the analyst said.

If Apple ultimately takes the plunge, the time frame could be longer given the safety and regulatory issues involved and the cautious disposition of Apple under Tim Cook with respect to new product launches, he said. 

Related Link: Apple Added More Gains In A Day On EV Rumors Than GM's Entire Valuation

One possibility is that Apple could announce an EV strategic partnership in 2021, Ives said. 

The chances of a strategic partnerships with the likes of a Tesla Inc TSLA or Volkswagen A G Unsponsored Represent 1 10th Sh ADR VWAGY or other auto manufacturers in China such as Nio Inc – ADR NIO and Xpeng Inc – ADR XPEV are in the 70%-plus range over the next few years, Ives said.

This could lay the groundwork for a dual path of Apple starting to build its own line of EV autos after 2025 if an EV/autonomous venture is successful with consumers, the analyst said. 

"In a nutshell, this would only expand the massive TAM for Apple over time to go aggressively after the EV market, however as we have seen in decades of following Apple many products/strategic ideas happen in the labs of Cupertino that ultimately never leave the confines of Apple Park." 

AAPL Price Action: Apple shares were down slightly at $131.87 at last check Wednesday.

Related Link: PreMarket Prep Stock Of The Day: Apple

Photo courtesy of Apple.