Mercedes Chief Laughs at Apple's Rumored Self-Driving E-Car

I'll worry about an Apple car when Apple starts worrying about a Mercedes phone, he says

2 min read
Mercedes Chief Laughs at Apple's Rumored Self-Driving E-Car
Dieter Zetsche, head of Daimler AG
Photo: Thomas Kienzle/AFP/Getty Images

Dieter Zetsche, head of Daimler and also of its car-making arm, Mercedes Benz, has said he isn't having “sleepless nights” because of the rumors that Apple is planning to enter his business.

“If there were a rumor that Mercedes or Daimler planned to start building smartphones then they [Apple] would not be sleepless at night. And the same applies to me,” he told Australia's motoring.com.au.

Zetsche thus swatted down a week’s worth of feverish speculation that Apple was about to build a self-driving electric car. Rumor-mongers cite Apple’s recent hiring binge among car technology companies like Tesla and A123, the battery company.

Tesla and A123 are known more for their electric-drive technology than for self-driving savvy, but the theory is that Apple, formerly known as “Apple Computer,” would naturally gravitate to the software side of things.

It's hard to understand what Apple might achieve with a car of its own. Apple's luxury products have double-digit margins—perhaps as high as 69 percent for the iPhone—whereas the auto business lives on margins of just a percent or two, even in good times (like now). Even relatively high-margin car companies, like Mercedes, find it devilishly hard to make the smaller-margin econoboxes. U.S. automakers learned that lesson the hard way back in the 1970s when they suddenly had to meet stringent fuel-economy requirements by building subcompact cars. 

Maybe Apple just wants to sell high-margin stuff to carmakers. If so, it may simply want to play with e-cars and automated driving systems, the better to understand them.

Google—which could well be following that same strategy with its famous robocar project—is working  hard on the super-detailed maps robocars will need. Recent sightings of Apple-owned vehicles festooned with laser-ranging devices, or Lidar, may have more to do with mapping than with car-making.

Apple does have the wherewithal to make cars. Its market capitalization—the value of all its shares—today stands at US $766 billion, more than any other publicly traded company. At the end of 2014 it had $178 billion in cash, enough to buy both GM (market cap: $60 billion) and Daimler ($104 billion). If Apple threw in some stock, as well, it could buy every big car maker in the world.

Of course, the car companies would have to want to be bought. And Apple would have to want to buy them.

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A worker works on the frame of a car on an assembly line.

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