Despite demurrals from Nissan and Hyundai, analyst Daniel Ives still expects Apple to choose a partner before the end of the year.
From a note to clients that landed on my desktop Monday:
With reports that EV talks with Nissan dissolved, we view this (along with the recent Hyundai news) all part of a detailed process while Apple picks its EV and autonomous partner.
We believe at this point it's a matter of "when not if" Apple will enter the EV race over the next few years. While the timing of an EV partnership 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.
With US auto stalwarts GM and Ford announcing very aggressive EV endeavors over the past few weeks along with Jaguar today 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.
Clearly the undisputed heavyweight champion of EV today is Tesla as Musk & Co. continue to dominate the EV industry globally with China the "hearts and lungs" of the Tesla growth story.
Taking a step back, the EV industry is entering a golden age as we believe the broader consumer demand trends, innovative battery technology, regulatory EV incentives/tax credits around the globe, and sleeker/affordable models are creating a perfect storm of the demand for sector. To this point, demand is skyrocketing for EVs in the field as we believe overall that EVs, which make up 3% of global auto sales today, could reach 5% by the end of 2021 and 10% by 2025. With a market that could be $5 trillion+ over the next decade, if Apple gets just 5%-10% of share this could represent another major growth pillar within Cupertino.
Maintains Outperform rating and Street-high $175 price target.
My take: Golden age? Perfect storm? Major pillar? Block those metaphors! (But thanks, Dan, for the Dating Game.)