(Reuters) – Shares of Apple Inc jumped nearly 5% on Tuesday, a day after only Reuters reported that the iPhone maker aims to produce a passenger vehicle by 2024 with its own battery technology .
At the heart of the company’s strategy is the design of a new battery that could “radically” reduce the cost of batteries and increase the range of the vehicle, according to the report.
“If Apple has achieved battery improvement, this could be a driver to move forward with production as battery costs are one of the main barriers to the adoption of EVs,” wrote Evercore analyst Amit Daryanani.
Apple shares eventually rose 3.9% at $ 133.27, on track to add nearly $ 86 billion to its market valuation.
Shares of electric car maker Tesla Inc fell another 3% on Tuesday. In Tesla shares, which fell on the S&P 500 index on Monday, losses were accelerated near the end of the session following news of potential competition from Apple in the near future.
“From Tesla’s point of view, we have long felt that technical players like Apple (working with manufacturing partners such as Foxconn) represent far more organized competition than established / legacy OEMs,” said analysts. Morgan Stanley in a note.
Apple has decided to tap outside partners for elements of the system, including lidar sensors, that will help self-driving cars to get a three-dimensional view of the road, Reuters reported.
Shares of Velodyne Lidar, a supplier of lidar systems for Apple’s fleet of self-driving test vehicles, jumped 14% Tuesday, while Luminar Technologies ’peers rose 8%.
It is unclear who would collect an Apple-branded car, but sources have said they expect the company to rely on a manufacturing partner to build vehicles.
“Initially, the most likely rollout would involve hundreds of Apple cars driving in U.S. cities for a year or two before they became more widely available,” wrote Gene Munster, managing director at Loup Ventures.
Reporting by Munsif Vengattil in Bengaluru; Edited by Sriraj Kalluvila