Apple, Inc. AAPL Car project is turning out to be a non-starter. After being in incubation for years, things began moving in late 2020, with reports throwing up many names as potential partners of the company in the venture.
What Happened: Apple's talks with the world's largest EV battery maker CATL and Warren Buffett-backed BYD Company Limited BYDDF have stalled, Reuters reported citing people familiar with the matter.
The predicament followed the two Chinese battery manufacturers expressing inability to meet Apple's demand of building a dedicated team and set up in the U.S. to cater to the company exclusively, the report said.
The setback comes more than four months after rumors suggested that Apple was in talks with CATL and BYD regarding battery supply to its self-driving car venture.
The report said that the two companies are the leading manufacturers of the cheaper lithium iron phosphate battery that Apple preferred.
Related Link: Why This Apple Analyst Expects Clear Upside To Q4 Street Numbers Across The Board
The development has made Apple turn to Japanese battery manufacturers for battery supply, and the company has already sent a team to Japan, Reuters said. Tesla, Inc. TSLA supplier Panasonic Corporation PCRFY is among the Japanese companies manufacturing EV batteries.
Why It's Important: Despite being a potential late starter, Apple is widely expected to have a significant impact in the EV industry once things get going. As is the case with the other products, Apple could disrupt the industry with its technical competence.
"Apple's track record of executing complex combinations of hardware + software + services suggests that the company can deliver something better in the car market, Loup Funds analyst Andrew Murphy said in a recent note.
Roth Capital Partners analyst Craig Irwin sees the launch of Apple Car as the biggest downside catalyst for Tesla's stock.
Further pushed-out schedule for Apple Car could be favorable for EV manufacturers, but Cupertino may have to contend with the cost of lost time.
Price Action: In premarket trading, Apple shares were edging up 0.15% to $149.70.
Related Link: Apple Plans To Go Solo With Car Project To Avoid Potential Delays: Report
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