The past week has seen the head-turning rumour that Apple is getting into the electric car arena. Probably the most significant rumour that set the idea alight was the news that an Apple employee contacted Business Insider telling them that Apple was involved in “vehicle development” and a sore point for Tesla, that employees were “jumping ship” to Apple.
“I think it will change the landscape and give Tesla a run for its money.”
The US$5 billion investment by Tesla in a “gigafactory” for lithium ion batteries for electric cars has got the graphite space a flutter with knowledge that new, long-term suppliers will be needed to feed that juggernaut. But if Apple is indeed getting involved in the same arena, and possibly Samsung too, in addition to Foxconn and LG Chem then demand in the coming years is on course for exponential growth.
iCar?
The single most credible rumour about a so-called “iCar”, comes from trusted online news publication Business Insider. Staff at BI received the now famous letter from an Apple employee who leaked their company’s secret, grand ambitions. As “rumours” tend to go, we never know if they’re planned publicity stunts. It’s clear that the latest Apple CEO is uninterested in his predecessor’s preference for intense corporate secrecy.
More than the letter-leak, BI staff research showed that over 50 Apple staff say they previously worked at Google, many of them were engineer interns at Google.
The Apple rumours – and papertrail – is building. Very likely Apple is up to something. It’s not just Apple’s hidden movements, but its competitors too which show something is up, Samsung is said to be buying up car assembly companies, though it’s unclear if that’s designed to scupper Apple or if Samsung Electronics is also getting involved in electric cars. Now Mining.com is reporting that Apple is being sued by lithium-ion producer A123 Systems for “systematically” taking their employees across to the other side.
Graphite Demand Will Have to Keep Up
The Tesla gigafactory alone is estimated by some to boost graphite demand by as much as 30% in 2020, and note that the factory juggernaut is now expected to be ahead of schedule, according to CEO Elon Musk. We already know a supply crunch is coming. Chinese graphite supply is dipping, partially related to the higher expenses with mining remaining desposits and partially because the government has been tough on the mining industry recently for environmental and safety reasons. China last year produced 70% of global graphite production. Chinalco’s (3668.HK) recent an agreement with Australia’s Syrah Resources (SYR:AX) for a 3-year contract to supply graphite before the mine is even running is a testament to the crunch coming, which must be particularly indicative and obvious coming from the world’s biggest producer of the commodity.
As anyone who has heard of Apple’s business already knows, the company doesn’t do anything in small doses. Record sales of their various products is as predictable as the knowledge that there will be a new iPhone annually. Another factor with Apple’s business is that it has long proven itself an elite strategist, sometimes moving years ahead of competitors and is remarkebly determined – whatever Apple’s involvement in electric vehicles, they won’t quit or work by halves. With fiscal firepower to the tune of US$178 billion in cash reserves, even if it’s split into various districts likely for tax maneuvers, the company isn’t short of the ammo to invest or sustain such an adventure.
