Apple Car speculation is back. Here's what we know so far

New York(CNN Business) Longstanding speculation that Apple will release its own electric, self-driving car was reignited last week when Reuters, citing unnamed sources, reported that Apple plans to produce a passenger vehicle by 2024.

Talk of the iPhone maker's ambitions to break into the auto industry has been swirling for about five years. Expectations for the effort, named Project Titan, range from the company developing its own Apple-branded car to providing operating system software to existing car manufacturers.

In April 2017, Apple received a permit from the California Department of Motor Vehicles to test self-driving vehicles there.

An Apple car has the potential to be "a transformative event" for the automobile and mobility industry in the coming decades, Morgan Stanley analysts wrote in a note to investors last week — much as the iPhone changed the game for mobile phones.

"There's just so much going on in [electric and autonomous vehicles] and connected tech," the analysts wrote. "It is perhaps a fitting time of the world's most valuable company to play its hand in the $10 trillion global mobility market."

Apple has kept mum about its car ambitions, and the company did not respond to a request for comment on the recent reports.

Although Apple is famous for its design and manufacturing firepower and is flush with cash, cars are a far different and lower-margin business. Still, coming from behind in a new market has been Apple's M.O.: Apple didn't invent the smartphone, for example, but it created an innovative, clean, user-friendly design that revolutionized the space and helped it dominate the market.

Here's what we know about the possible Apple car.

Why would Apple make a car?

Electric vehicles are a burgeoning industry, and excitement around it hit a new peak in 2020. EV companies have watched their stock prices and fundraising dollars grow healthily this year, in contrast to the many businesses limping through 2020's pandemic.

Analysts suspect that Apple, and other tech companies such as Google's Waymo, want in on that opportunity -- especially as infrastructure expands to support greater electric vehicle adoption.

Apple may also be eying the rapid growth of Tesla, the world's leading electric vehicle producer. (CEO Elon Musk recently tweeted that he approached Apple CEO Cook about a sale to Apple during the early days of Tesla's Model 3 program but said Cook declined to meet. Apple did not respond to a request for comment.)

Tesla's market cap has ballooned to more than $630 billion — after shares soared 682% this year — making it worth more than the combined market value of most of the world's major automakers. Given that car development typically takes four to five years, Apple could be hitting the gas now now to ensure it can be a viable Tesla competitor.

"If they continue to wait, could Tesla run so far ahead of them that Apple could never play catch up?" DA Davidson analyst Tom Forte said.

Some experts think it's more likely Apple will partner with one or multiple car makers to sell a car operating system, self-driving software or other related technology, rather than making the entire vehicle.

"Probably partnering makes the most sense," said Mike Bailey, director of research at FBB Capital Partners. "The one issue that I've heard of is that cars can be less profitable relative to Apple's other products, so that is a concern if Apple is going to be shifting gears into a less profitable business line."

It took Tesla years to become profitable, posting its first annual operating profit in January 2020 after nearly a decade as a public company.

Producing a car, or even just an operating system, could be a new revenue growth area for Apple, something the company has been working to generate after inconsistent sales growth of its biggest revenue driver, iPhones, in recent years.

Building self-driving cars could also create more time for people to use their iPhones, other Apple devices and Apple services. Around the world, drivers and passengers spend 600 billion hours inside cars annually, according to Morgan Stanley analysts. Among Apple's car-related patents: a virtual reality system that could help passengers work in a car without getting motion sickness.

"If you look ahead, It's hard to see the Apple car being the next big thing in the way that, say, cloud has been for Microsoft and Google. But then again, no one really saw cloud coming," FBB's Bailey said. "This could be really interesting for Apple, but it seems like a long shot."

Wait, car-related patents?

Apple has been granted many patents for a wide range of inventions for vehicles, such as systems for controlling the motion of autonomous (or partially autonomous) vehicles and methods for adjusting the transparency or opaqueness of car windows.

Apple has also fought to protect car-related intellectual property. In 2019, the FBI accused two Chinese nationals working for the company of stealing trade secrets from its self-driving car project. Apple said in a court filing that the exposure of confidential material would be "enormously damaging."

Who is working on the project?

A LinkedIn search shows that over the past few years, Apple has hired experienced executives, engineers and supply chain managers from Tesla, Google's Waymo, Fiat Chrysler, BMW, Ford, Uber and other auto industry leaders.

Project Titan has attracted talent like Doug Field, who developed vehicles at Tesla, Ford and Segway, and Julian Honig, a former Audi designer.

Field joined Apple in 2018, according to his LinkedIn page. CNBC reported in January 2019 that Apple had laid off 200 people from Project Titan; Apple at the time would only share a statement describing a staff reshuffling involving workers switching to other teams.

In short, the project's exact size and makeup are not clear.

What's next?

In the near term, analysts say Apple likely has a few more urgent priorities, like building up the ecosystem around its 5G iPhone and ramping up its healthcare efforts.

But the idea of an Apple car remains a tantalizing possibility.

"Do I think that Apple could be a significant competitor in electric, autonomous vehicles if desired?" asked DA Davidson's Forte. "Absolutely."