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Will the Apple Car mean “R.I.P. Tesla” on November 19?

What's Jeff Brown pitching as the "Apple Car" takeover target in Exponential Tech Investor?

By Travis Johnson, Stock Gumshoe, November 3, 2021


Jeff Brown’s latest pitch about an “Apple Car” is similar to stories that have made the rounds several times over the past five years, teasing companies from Tesla to Magna International as potential partners for this secretive project to put four wheels on an iPhone and take over the world. Here’s a little taste, it opens with Apple’s reported snub of Elon Musk in 2017, when Tesla was in trouble and needed a deep-pocketed partner but Apple apparently wasn’t interested:

“Apple has been secretly working on its own electric car. Musk’s company was worthless to them.

“In fact, they are hellbent on crushing Tesla and every other major carmaker.

“When it comes to the development of new breakthroughs…

“Apple has been outspending Tesla by a factor of 12-to-1.

“That’s why Forbes now says Tesla’s days could be numbered because of the Apple car.”

And, of course, if you place your bets before the “big reveal,” prepare for buckets of cash to rain down upon you… which is why you need to pony up mucho dinero for Jeff Brown’s expertise (I can’t get the order form to open at this point, but the letter being teased, Exponential Tech Investor, is generally pitched at $2,000/yr).

“… for investors who act before the big reveal happens, this spells an opportunity like no other.

“A shot at massive gains.

“To put things in perspective, CNBC says the Apple car has the potential to dwarf the iPhone… Apple Watch… or any revolutionary product Apple has ever made.”

That strains credulity, to be sure — Apple has annual revenue of more than $350 billion, most of which is from the iPhone either directly or indirectly. Ford, which makes the top-selling vehicle in the US, by far (the F-150 pickup truck), has annual sales of about $135 billion. And while Apple may eventually be able to make its own branded car and sell it at a high gross margin if they can transfer their brand power to a new market, it would take a very long time to get there, and they’re never going to have profit margins for cars that come anywhere near the margin they have for mobile phones (Apple had gross profits of $150 billion, more than 40% of sales… Ford had gross profits of about $19 billion, less than 15% of sales, and that’s a pretty high gross margin for an automaker — GM is lower, VW and Toyota are slightly higher, Tesla is in the 20-25% range lately on its less than $50 billion in sales, Ferrari, which is comparatively tiny with less than $5 billion in annual revenue, is really the only large auto brand strong enough to demand gross margins as high or higher than Apple).

And there’s apparently “one small company” that will make the Apple Car possible… and a catalyst coming up in a couple weeks. More from the ad:

“Morgan Stanley pegs the opportunity at $10 trillion.

“And according to my research, one small company that will set it all off could explode on November 19. Just days from now.”

Other hints about this company? Here’s a bit:

“Apple is notoriously secretive about their new breakthroughs. Nothing has been formally announced yet.

“But based on all my research, the biggest winner will be a tiny technology company out of California, just 350 miles away from Apple headquarters.

“It’s microscopic compared to Apple. More than 500 times smaller.

“But its technology is so revolutionary, Wall Street and Silicon Valley are scrambling to buy every available share.”

OK, so far we’ve got something going on on November 19, a company less than 1/500th the size of Apple (which should mean a market cap below about $5 billion), headquartered or somehow located in California (probably in Southern California, I imagine — Los Angeles is roughly 350 miles from Apple’s Bay-Area headquarters in Cupertino).

Other hints?

We’re told that this company might be a beneficiary of something like the “iPhone effect,” where suppliers to Apple enjoyed huge gains as iPhone sales soared…

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“As the world’s most valuable technology company, the technology giant holds an enormous sway. For tiny technology companies, a lucrative partnership with Apple often amounts to a billion-dollar windfall.

“And because these companies are typically much smaller than Apple, their stock market returns can be exponentially bigger, too.

“That’s exactly what happened with the iPhone…”

That wasn’t the first revolution at Apple, of course, it’s just the one we remember now, because the iPhone became so dominant — it was actually the iPod that put Apple on the map for investors again, driving interest in Steve Jobs’ revolution for the music business, and there were plenty of iPod suppliers pitched by investment newsletters 15-20 years ago as well.

So what’s the story? Well, no surprise, Jeff Brown sees one “tiny electric car company” as being next in line for the “Apple effect” — here’s how he puts it in the ad:

“I believe the Apple effect is about to hit one tiny electric car company – even before the Apple car is officially announced.

“In fact, I’m 100% convinced it could happen as soon as November 19.”

That’s pretty squirrelly language, of course — “100% convinced it could happen” is no different than saying “it might happen,” but I bet the latter would sell many fewer newsletters.

And Brown goes on to detail some of the rumors and indicators pointing to the Apple Car being imminent…

“In my mind, there’s no doubt about it. Apple is going for the jugular with the electric car.

“Ming-Chi Kuo is widely considered the most tapped-in Apple insider on the planet. He’s convinced the electric car will be Apple’s “next star product.”

“According to my sources, Apple is pouring all its engineering might into it. They even tapped Tesla’s top engineers and executives from BMW, Ford, and Mercedes Benz.

“Documents submitted to the federal government show a total of 5,000 experts are involved with the project.

“My team and I have been tracking this story for months. We uncovered over 100 patents dealing with the Apple car. And new ones are being filed almost weekly.

“All this points to one thing…

“Apple is pulling out all the stops to bring the car to life as soon as possible.”

The chatter about an autonomous Apple EV has certainly picked up some this year — they’ve called that initiative Project Titan, and it’s been in the works since 2014, but there have also been rumors about the project being scrapped at least once, and it has reportedly changed directions and strategies several times, from being tied to the “Apple CarPlay” iPhone integration to being a plan to partner with Hyundai or Kia on an Apple-branded car, to a full self-developed EV with the Apple logo. The latest roundup of rumors and speculation by Apple Insider in August had people guessing that production of an Apple car could come as soon as 2024 or 2025, though none of that sounds particularly firm.

So… what’s that tiny partner? Here are the other clues:

“Before this new breakthrough is even officially revealed….

“A tiny technology company – with the potential to become Apple’s key partner on the Apple car – will start its meteoric rise.

“In fact, a major announcement that could set it all off is due on November 19. That’s just days from now.”

And then the more specific hints that really give us our answer:

“It’s no coincidence on Morgan Stanley trading floors, this company is considered a top electric car stock.

“At the helm of it is a man known in tech circles as the ‘Steve Jobs of cars.’

“An immigrant who dreamed of doing big things. A visionary billionaire never afraid of making big, bold bets. A mover and shaker in the global electric car industry.

“He was instrumental to the rise of Tesla. Elon Musk brought him in to design the first Tesla car, which quickly became a best-seller.

“If he plays his cards right, his next big move could ultimately be the Apple car.”

We’re also told that this company is following the model of Apple (and of the fabless semiconductor companies) in outsourcing production of their vehicle instead of building a factory — and that Brown says this is the only EV company that is doing it in this “asset light” way.

“It’s no coincidence their prototype electric car was recently spotted at Apple headquarters in Cupertino.

“The Detroit Bureau reports Apple engineers wanted to get a closer look at this company’s revolutionary technology.”

More from Brown:

“I think it’s highly likely that at some point Apple will just want it all for itself. I expect them to swoop in and buy the whole company.

“Especially considering that the tech giant is sitting on a $200 billion mountain of cash.

“An acquisition of this tiny company wouldn’t make a dent in Apple’s war chest. But it would cement them as an undisputed electric car leader – virtually overnight.”

And one more Apple link: They use the same contract manufacturer. Here’s how Brown puts it:

“I uncovered a fascinating piece of proof. A smoking gun of the company’s true long-term plans.

“To hit the ground running as soon as possible, they inked a major deal with a major manufacturer.

“And not just anyone.

“It’s the same company used by Apple for the assembly of nearly all its products. Millions of Apple devices each year are made under the same roof.

“This cannot be overstated. Can you see why I’m convinced they’re a perfect candidate for a major deal with Apple?

“This tiny technology company has nearly everything in place for the Apple car rollout. All that’s missing is the official announcement of its partnership with Apple.”

Well, not literally the same roof — Apple uses Foxconn to build most of its iPhones, almost all of them in China, and Foxconn is also planning to do contract manufacturing for automobiles… but those Foxconn-built cars will, they anticipate, be rolling out of the Lordstown plant that they just bought, from Lordstown Motors, in Ohio.

So yes, this is a teaser pitch for one of Foxconn’s future customers, run by a visionary designer who helped on the Tesla Model S: Fisker (FSR). That’s Henrik Fisker’s new company, it came public through a SPAC merger and has one EV planned for next year and another possible model to be introduced after that… not to be confused with Fisker Automotive (FAH), which produced the Fisker Karma for a little while and was also touted as a “next Tesla” company in 2009-2010 or so, with a half dozen rumored disruptive designs about to be released before it went bankrupt in 2013. Fisker has followed the “over promise” strategy of Elon Musk for 15 years now, but unlike Musk, who eventually “delivered” on many of his promises, albeit much later than anticipated, Fisker has provided serial disappointment for fans of his car designs.

The latest Fisker car was supposed to be the eMotion, another high-end sporty sedan to compete with Tesla’s Model S or Lucid Motors’ Air, but a couple years ago Fisker shifted gears to start with a midsize SUV instead, hoping that would be a more profitable segment to enter.

And what’s that November 19 moment that will supposedly send Fisker’s shares soaring? It’s the LA Auto Show, at which Fisker will be showing off their Fisker Ocean EV, the car which they pitch as being extra eco-friendly and “emotionally appealing” (it is pretty cool looking, to be fair). Last I saw, the car was scheduled to begin production in “late 2022,” though I don’t know particularly when and wouldn’t hold my breath on the date. It remains to be seen how it will compare to the competition once it hits the market — it’s essentially going up against the Tesla Model Y in size, specifications and price, so although the model shown at the auto show may not be the production model, exactly, I guess we will at least get some sense of how it might compete.

Will Apple partner with Fisker and develop a car in the near future? Well, the Apple Car has been rumored for about a decade now, and Apple’s longtime manufacturing partner, Foxconn, is pushing into building automotive assembly plants, buying the Lordstown plant and partnering with Fisker for their next EV in development for 2023 or 2024 (their first car, the Fisker Ocean, is not a Foxconn project, that’s being built by Magna (MGA) in one of its European plants — and if you want to speculate on contract manufacturers, Magna is a much safer bet than Hon Hai/Foxconn, since they’ve been assembling cars and car parts for decades).

There are plenty of connections if you want to conjure up scenarios, but I wouldn’t hold my breath — I suspect Fisker’s car with Magna will probably be released late, and that their next car, scheduled for perhaps 2023 or 2024 from that Foxconn Lordstown plant, will hit meaningful delays as well, and I have very little faith that Fisker will generate meaningful sales in the next five years, during exactly the time period when dozens of high-profile new electric vehicles will hit the market from both new and established automakers.

I expect I’m quite biased here, to be clear — my skepticism probably comes from the fact that I have strong memories of Fisker overpromising and, in my view, misleading investors and regulators in the years leading up to his last bankruptcy. And to be clear, I don’t trust Elon Musk, either, after his years of overpromising and (again, in my view) breaking securities laws with Tesla, and that means I have not had the pleasure of being a Tesla investor, to my financial detriment… though I do acknowledge that he has made it work to this point, even though that’s at least in part due to his cult of personality and his big-picture vision that appeals to investors.

Fisker has news coming this week, as well — they’ll be reporting tonight after the market close, and I’m sure the conference call will be heavy on discussion of their production plans for the Ocean. They did announce a battery supply deal just yesterday with CATL, the huge Chinese battery company, so they have at least some of the battery supply they’ll need from 2023-2025, and certainly the chatter at the COP26 climate summit in Glasgow has provided a little boost to a lot of green energy and EV stocks this week, but I don’t know what Fisker will be saying this evening or whether it will be taken well or poorly by investors. The word to this point has been that they will show the car at the LA Auto show, and that they’re on track to begin production in about a year.

What else do we know? Well, you can go back to the original presentation from the SPAC deal if you want to get some context for what they’re promising — the idea of production starting at the end of 2022 is still in place, so that has not yet slipped in the past year and a half or so, though that’s a little surprising since they switched the basic platform design of the car last year (it was supposed to use Volkswagen’s MEB platform, but that deal fell apart before it was finalized, which is why Fisker then switched to Magna as its assembly and powertrain partner). At that time, they were anticipating 8,000 Ocean SUVs produced in 2022 and 51,000 in 2023, leading to free cash flow in 2023… and I’d bet almost anything that none of those numbers will be hit, but that doesn’t mean the company will fail or the stock will fall — investors have not been particularly pushy about holding SPAC deals to their rosy projections — it just means I think production and revenue will come more slowly, as has been the case for pretty much every new EV model released so far. They think the money raised to date, primarily from the SPAC deal, about a billion in cash, will be enough to get through to commercial production, and since they’re doing contract manufacture through Magna that may well be true (they at least haven’t spent much of that cash yet).

So what’s the story? If people have some belief that Fisker can have a Tesla-like story, the stock will soar — and they do say that they intend to ramp up their marketing in conjunction with the introduction at the LA Auto show in a couple weeks, so perhaps that will raise their profile for investors. If the company doesn’t quickly get that kind of Tesla halo, then I expect investors will have to be quite patient. The same is true of other EV makers, including the high profile IPO of Rivian scheduled for next week, though whether the Fisker connection gives you pause or gives you confidence is probably a personal question. I’d hesitate to compare any of them to Tesla, if only because Tesla stock defies logic and we shouldn’t expect that of any other company, but that doesn’t mean it’s impossible, Fisker could certainly catch fire and delight investors at some point. Right now, as of their last quarterly update, it’s a $5 billion company with a car that will be built by Magna in Austria and available for delivery in 2023, maybe at a pace of as much as 5,000 units a month, and with preliminary designs underway for a second model to be built by Foxconn (the updated investor presentation is here, if you want more background). They have 17,500 reservations for the Ocean, they say, and aim to have 25,000 by the end of this year. I can see the appeal of an “asset light” auto designer, particularly given the challenges and costs of building your own car factory, so it may well be that Fisker ends up being a more appealing investment than many of the other startups… I just don’t really want to put my faith in Henrik Fisker at this point, so I’ll watch from the sidelines.

Morgan Stanley does disagree with me on that, to be clear, it’s not just Jeff Brown being bullish on Fisker — they did say in August that Fisker is their highest-rated de-SPAC EV Startup (a mouthful, no?), and that “the electric-car maker is the rare EV startup likely to launch its vehicles on time and that the stock has room to more than double in a year’s time.”

So I’m afraid that, as usual, it’s you who has to decide how to invest your money — skeptical of Fisker? Think they’ll be acquired by Apple and that the Ocean will be a massive hit following its formal unveiling at the LA Auto Show in a couple weeks? Something in between? Let us know with a comment below… and thanks for reading!

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Jung
Guest
Jung
November 7, 2021 10:46 am

Its more likely Apple release an iSkateboard than iCar! EV is simply cannot be rolled out mainstream… the problem is NOT the battery, its ELECTRICITY which (mainly COAL generated) would need to triple if every car went EV! Plus, everything Brandon touches turns to manure so good luck!

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sirgeorgemartin
sirgeorgemartin
November 11, 2021 10:12 am
Reply to  Jung

“everything Brandon touches turns to manure”? How about you STFU and leave iditiotic, simple-minded hack political statements out of the discussion? Virtually every economic ill we’re currently experiencing is a direct or indirect result of the pandemic; if you’re in favor of letting the free markets take care of things, this is exactly what’s going on. Excess demand + supply shortages = rising prices. Simple enough for you?

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Neuroscents2
Member
Neuroscents2
November 7, 2021 1:18 pm

I subscribe to all of Jeff Brown’s portfolios. Exponential Tech is more speculative as I think and more long term and early as he says.. On Aug 16 2021 he rec FSR with buy up to $17 and is $19 now His latest ev car related picks are INDI, a semi, in his Exp fund and BWA which he sees as a battery play in another fund. Hope that helps I’ve been very impressed with his picks and his explanations; best in my 40 year investing/gambling experience.

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James Mann
Member
James Mann
November 7, 2021 8:01 pm

Tom Gentile next trillion crypto coins

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roozie
November 18, 2021 7:32 am

JB’s latest “urgent” Fisker warning….announcement imminent….

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willykid
November 18, 2021 9:53 am
Reply to  roozie

LA Auto Show this weekend. Fisker based in the LA-area. Could be a perfect venue/timing for a partnership announcement. We shall see …

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roozie
November 22, 2021 10:02 am
Reply to  willykid

So what was the announcement? His alerts were very specific about this taking place on the 19th -tho’ believe the LA show runs until the 29th so perhaps all will be revealed soon enough. Can’t imagine he fabricated it completely or would just serve to discredits himself!?

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willykid
November 22, 2021 3:47 pm
Reply to  roozie

So, these types of offers are very clever in their specific choice of wording. Notice he uses the word “could”, not “will.” For example, “a major announcement that could set it all off is due on November 19” and another example “and according to my research, one small company that will set it all off could explode on November 19. The word “could” introduces a possibility, not something definite. My $0.02.

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roozie
November 18, 2021 7:33 am

Any thoughts anybody on Jeff B’s latest urgency around the company he believes will go into partnership/be bought by Apple? He’s claiming ithas x1000 potential which would give it a market cap of 6T+!!!! Are you guys buying in to this or is it Jeff hype?!

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willykid
November 22, 2021 3:54 pm
Reply to  roozie

Personally, I do … but from more of an asymmetric investment. What he says makes sense as we all know that EV’s will phase-in over the next decade. Plus Apple confirmed they want in on the EV game. So, knowing Apple will not be a OEM, they will need to partner with someone — which gives Fisker an advantage worth betting on. I’m up 35% on Fisker since getting in at the end of October, but managed my investment based on the speculative nature of the investment. Will see where this goes in 2022.

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dreamdoc
November 20, 2021 3:11 pm

I don’t understand…. what is the November 19 announcement? Certainly, it was announced that Ford (F) will not move forward in partnership with Rival RIVN). (Frankly I think Rivian is trying to do too much prematurely), but what was the announcement that is relevant to Fisker or Apple?

I have decided to place a small position in Lucid (LCID.) I love the car, and they are more clearly doing what they say they will do.

Would love your thoughts Travis…

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willykid
November 20, 2021 3:28 pm
Reply to  dreamdoc

See my comment above. It was speculated that on Nov 19th (the official start of the LA Auto Show) that Apple could possibly announce a partnership with Fisker. I don’t think that happened, but what did happen was Apple committing to a strong desire to have a fun;ly autonomous vehicle by 2025 — there was a Bloomberg report on this yesterday. If Apple wants to get into the EV game, it would need to partner with someone as they are not in the manufacturing business (even with their phones and Macs — it’s all outsourced). So, if Apple wants to get into the EV game, a speculative partner would be Fisker.

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roozie
November 22, 2021 5:23 pm

“Of course, all of this raises the question… Who is going to manufacture these cars?
This is one of the exciting unknowns for us to watch… And Foxconn is one of the players of interest. It already manufactures many of Apple’s current products. And it recently unveiled three electric vehicle prototypes it plans to manufacture.
Another possibility would be a Japanese automotive manufacturer like Toyota, which is the parent company of Lexus vehicles.”

Quoted from JB’s Bleeding Edge today…is he backtracking on Fisker?

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Trucker MB
Trucker MB
November 30, 2021 10:45 am

The 2021 LA Auto Show just finished and no sign of Apple anouncements that Jeff Brown was anticipating. I saw Jeff Brown upselling again recently in YouTube add. He just keeps on selling snake oil again and again. Off course at least 20-25% of any gurus endorsed portfolio will be profitable. These BOP upsellers are also not making it great, I thought maybe if there was no Covid19 5G and 2.0 will mostly be uphill.

Thanks GUMSHOE for your discussions

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Darrell
December 12, 2021 6:22 am

Woke Apple engineers are losing interest in the Apple Car (i-car). Several key engineers on the i-car project have left Apple for better. They’re going to Joby Aviation, Archer Aviation, Rivian Automotive, all E-vehicle startups. The “everyone wants self-driving cars” myth is a cult belief stubbornly held by closed bubbles at Tesla and Apple but not supported by surveys of the average car owner, no matter how “innovative” the concept seems to some.

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Belle Harper
Belle Harper
February 20, 2022 3:03 am

This pitch, copied from above and added below, I am sure was about a tiny LIDAR company in SoCal that Apple was going to be using, very maybe buying to develop the Apple Car. So does anyone know what this LIDAR company is?
===========
“But based on all my research, the biggest winner will be a tiny technology company out of California, just 350 miles away from Apple headquarters.

“It’s microscopic compared to Apple. More than 500 times smaller.

“But its technology is so revolutionary, Wall Street and Silicon Valley are scrambling to buy every available share.”
============

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