This Should Keep Owners of TSLA Stock Up at Night
It looks as though Tesla Motors, Inc. (NASDAQ:TSLA) could have some serious competition on its hands soon, because Apple Inc. (NASDAQ:AAPL) is working on an electric car that could revolutionize the automobile industry. Should owners of TSLA stock be worried?
While there has certainly been a great deal of speculation over what an Apple car will look like, the likelihood of it becoming a reality has now nearly become certain. The implications for the Apple stock price are huge, and the auto industry can only tremble in anticipation.
During a recent tech summit in San Francisco, for example, an industry expert panel came up with a breakdown of what an Apple car would look like by piecing together individual bits of information and rumors (Source: C3 Report, last accessed November 13, 2015.) The results are chilling for the Tesla stock price forecast and with good reason.
The Apple Car Is a Game-Changer
Codenamed “Project Titan,” the upcoming Apple car is still little more than a public secret, but some details have been discerned with a good deal of certainty. Amid the company’s recent hiring spree of automotive techs, Apple has filed for permission to build an automobile work area in California and has leased a highly secretive research and testing facility in California, too.
What should have owners of Tesla stock up at night, however, is the clever way through which Apple plans to obscure its efforts. Apple is now rumored to have created two shell companies through which to better hide its research, development, and manufacturing of the Apple car. (Source: “Apple reportedly sent one of its secretive shell companies to an auto industry conference,” Business Insider, November 10, 2015.)
On a less sinister-sounding note, there has been much talk of interesting new pieces of technology, such as smart windshields, though the exact details remain mute.
While this is all very exciting news for AAPL stockholders, Tesla stock could be taking big hits soon if what’s been dubbed the “iCar” proves a worthy competitor to Elon Musk’s product.
But there’s more bad news for Tesla, because Apple has been hiring many experts in high-tech fields. This includes specialists in artificial intelligence and electric batteries, among others. (Source: “Apple’s auto-industry hires suggest an interest in more than software,” MacWorld, February 19, 2015.) All signs point toward Apple working on an extremely high-tech car, one whose features may well prove superior and more exciting to Tesla’s offerings.
The Bottom Line on TSLA Stock
Whichever way you look at it, Apple stock is likely to soar on the back of an automobile offering in the near future, while the Tesla stock price could be finding new lows.
There’s no shortage of issues for the TSLA stock price, but the company at least enjoys the unwavering confidence of its shareholders. While Tesla still has a great deal of momentum on its side and Tesla stock has huge upside potential, Apple’s rumored entry into the electric car market may indicate that serious trouble is on the horizon.
Along with its anticipated rivalry with Apple and other companies, Tesla is still hemorrhaging cash at an alarming rate and it’s becoming undeniable that the long-term risk for Tesla stock is growing. With a rising competitor as powerful as Apple setting its sights on Tesla, can Elon Musk’s company survive? It’s for this reason that I remain skeptical about the Tesla stock price.