Apple Advised Against Becoming a Carmaker

Apple Inc. has received plenty of unsolicited advice to rethink its apparent interest in marketing its own electric car.

Last week media reports said the company is quietly developing a crossover-style EV. The news prompted auto industry executives, including former General Motors Co. CEO Dan Ackerson, to caution Apple about the massive costs typically involved in carmaking even if the company farms out production to a contract assembler as it does for its iPhones, tablets and laptops.

Several analysts also say the auto industry's low margins are a barrier to entry. Many suggest Apple shareholders would consider carmaking a poor application of the company's staggering $178 billion cash trove.

Still, EV production is significantly cheaper than making cars propelled by piston engines. And observers note the marketing power of the Apple brand would give the company an important advantage if it follows through.

Many analysts believe Apple's would-be interest in EVs could accelerate development of such vehicles by established carmakers, even if the company decides against launching its own electrics.