Apple Held Talks With McLaren -- WSJ
September 22 2016 - 3:03AM
Dow Jones News
By Robert McMillan and Tim Higgins
Apple Inc., which is working to build an electric car, has held
talks about investing in British sports-car maker McLaren
Technology Group, according to a person familiar with the matter,
but McLaren denies any talks are ongoing.
The person familiar with the matter said the discussions began
"several months ago" but wouldn't discuss whether they are
ongoing.
For its part, McLaren said in a statement, "McLaren is not in
discussion with Apple in respect of any potential investment."
The person familiar with the matter also said Apple had held
talks with Lit Motors Corp., a closely held San Francisco maker of
two-wheeled electric vehicles. Lit declined to comment.
Together, the reports suggest that Apple, which recently laid
off several dozen employees who had been working on its car
project, may be refocusing its efforts and bolster its
automotive-engineering expertise.
"What McLaren has right now is basically a big research center
-- it's an R&D center for automobiles. You're talking different
manufacturing techniques, different material techniques," said Neil
Cybart, an analyst for Above Avalon, which follows Apple. "It's not
an insult to say that Apple does not have expertise in this -- it
is just not the equivalent of going from a Mac to an iPod to an
iPhone, where they did not look outside for help, they need a lot
of people who know cars, who know car manufacturing."
The Financial Times earlier reported that Apple was in talks
about investing in or acquiring McLaren. The New York Times earlier
reported the talks with Lit.
Apple has been restructuring some elements of its secretive car
effort, code-named Project Titan, since placing it under the
management of veteran Apple executive Bob Mansfield in July. Apple
already has several hundred employees working on the effort, but
Mr. Mansfield has closed some elements of the project, prompting
the recent layoffs.
Initial Project Titan designs resembled a minivan, The Wall
Street Journal reported last year, but a company like McLaren would
open the door to a new world of materials expertise.
"McLaren is well-known as a manufacturer of high-performance
sports and racing cars, but its true expertise is in engineering
lightweight materials such as carbon fiber and aluminum, both of
which are key building blocks to designing an innovative
lightweight vehicle," Michael Harley, an analyst for Kelley Blue
Book, said in an emailed statement.
It wouldn't be unusual for a company such as Apple to look to a
specialty auto maker for help jump-starting its car-making efforts.
Tesla Motors Inc., for example, worked with Group Lotus PLC in its
early days, including using the auto maker as a contract
manufacturer to build the Roadster.
The McLaren F1 is a favorite of Apple marketing chief Phil
Schiller.
McLaren Automotive is a small-scale manufacturer, which sold
fewer than 2,000 cars in 2015. Chief Executive Mike Flewitt told
Automotive News in May that the company plans to invest nearly $1.5
billion over the next six years in research and development of 15
new products. Mr. Flewitt told the publication that McLaren hopes
to sell 5,000 cars annually by 2022.
"We need to invest a lot of money to be able to produce cars
that are competitive against some pretty high-powered competition,"
Mr. Flewitt said.
The automotive unit has more than 50 dealerships around the
world and employs more than 1,000 people, according to its website.
The company sells cars that range in price from less than $200,000
to more than $1 million, according to Kelley Blue Book.
Lit Motors represents the other end of the vehicle spectrum. The
San Francisco startup is working to build a $24,000 electric
motorcycle that stands up on its own. The system uses gyroscopes to
keep the two-wheel vehicle standing upright, even if it is involved
in a collision, the company says on its website. That kind of
technology could prove useful if Apple builds a self-driving
vehicle targeted at dense urban environments.
Write to Robert McMillan at Robert.Mcmillan@wsj.com and Tim
Higgins at Tim.Higgins@wsj.com
(END) Dow Jones Newswires
September 22, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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