Tesla, Google, Apple: is Silicon Valley the future of the US car?

Tesla, Google, Apple: is Silicon Valley the future of the US car?
A Tesla S electric car is displayed during the second press day of the North American International Auto Show in Detroit, Michigan January 13, 2015.

NEW YORK - Is the future of the US car industry in Silicon Valley?

After Tesla and Google, Apple appears to be readying for a plunge into the industry long rooted far away in the steel belt of the US upper Midwest.

According to various media reports, the maker of iPhones and iPads has created a special unit baptized "Titan" with hundreds of staff to begin developing an electric car, with 2020 the target date.

Apple remains silent on the project, but the reports were partially backed up by a lawsuit filed against the tech giant. Battery maker 123 Systems has accused Apple of aggressively poaching its staff.

But it puts Apple in line with Tesla, the current champion of the electric car, and Google, the online giant which is focused on the self-driving, also-electric Google Car.

The Big Three US automakers - General Motors, Ford and Chrysler (now a part of Fiat Chrysler Automobiles, FCA) - are taking the threat from the Detroit outsiders seriously.

"Given the company's (Apple's) tremendous capabilities, that is no surprise to anyone," GM spokesman Dan Flores told AFP.

At Chrysler, spokesman Eric Maynes said: "We can't comment on something we haven't seen." Ford too had no comment on Apple's plans, but the number two automaker recently opened a research centre in Palo Alto, the heart of Silicon Valley, as it looks to the future of self-driving automobiles.

Bill Visnic, an analyst at industry specialist Edmunds.com, said that given the seven-year average time frame to develop and bring a car to the mass market, the Detroit giants are not under serious pressure yet.

Even with the unexpected success of Tesla, for instance, the company still sold less than 35,000 cars last year in an national market of more than 16 million units. And Tesla's cars are confined to a very high-end niche market.

"Apple is not an immediate threat to the US auto industry. I don't think you'll see the volume there, the number of cars won't really begin to approach anything like Detroit is making right now at any time soon," said Visnic.

Alec Gutierrez, a market analyst at Kelley Blue Book, said Apple's strength is its role as a "disruptor" in industries, and that the "comprehensive ecosystem" of its popular consumer electronics could be extended to an "Apple car".

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