Apple is in discussions with multiple suppliers for lidar sensors, according to a Bloomberg report from Feb. 19. Light detection and Ranging (LIDAR) sensors are laser-based sensors used in driverless cars to enable the car’s computer to “see” its surroundings.
Meanwhile, Apple (AAPL) has been working on its autonomous car project for the past several years and while it has developed most of the necessary software and artificial intelligence (AI) algorithms in-house, it is looking at an outside supplier to provide the critical hardware needed for such a car, Bloomberg said.
According to a number of reports over the past month, Apple has held talks with different automakers regarding the production of autonomous vehicles. Last week, Nissan denied that it was in discussions with Apple for a tie-up regarding the company’s autonomous car project.
Earlier this month, Hyundai Motors and Kia Motors said that they were not in discussions to partner with Apple for the development of autonomous vehicles following media reports that preliminary talks with Apple, which had been initially confirmed in Jan., had been paused.
Apple is reportedly seeking to build a vehicle for consumers and has a goal of building a personal vehicle for the mass market in contrast to rivals such as Alphabet (GOOGL) Waymo, which has built robo-taxis to carry passengers for a driverless ride-hailing service. (See Apple stock analysis on TipRanks)
Earlier this month, Wedbush analyst Daniel Ives, who has a Buy rating on the stock with a $175 price target, argued that now the question is “when not if” Apple will enter the EV race over the next few years.
“While the timing of an EV partnership with the likes of Hyundai, or another automaker, remains a key focus of the Street and EV industry over the coming months we assign a 85%+ chance that Apple will announce an EV partnership/collaboration over the next 3 to 6 months,” Ives wrote in a note to investors.
“With US auto stalwarts GM and Ford announcing very aggressive EV endeavors over the past few weeks and a Biden-driven green tidal wave on the horizon, we believe now is the time for Apple to dive into the deep end of the pool on the EV front,” the analyst added.
“Apple with the right partner would be a major force in the EV industry and could disrupt market share from the likes of Tesla, GM, Ford if the company is able to get the Apple Car on the road by 2024,” he summed up.
The rest of the Street is cautiously optimistic about the stock with a Moderate Buy rating. That’s based on 19 analysts suggesting a Buy, 5 analysts recommending a Hold, and 2 analysts suggesting a Sell. The average analyst price target of $149.70 implies 15.3% upside potential to current levels.
According to the TipRanks Smart Score system, Apple scores a 7 out of 10, indicating that the stock is likely to perform in line with market averages.
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