Goldman Sachs Explains Apple’s Interest in Developing its Own Car

A recent Reuters report has claimed that Apple is moving forward with self-driving car technology and is targeting 2024 to produce its first passenger vehicle. However, analysts say that even in optimistic scenarios, Apple’s profit potential in the low-margin car business is minimal.

In a note sent out to investors today, Goldman Sachs has noted that even if Apple manages to sell hundreds of thousands of vehicles, the earnings impact would be minimal, Business Insider is reporting. 

“The lower profitability of the auto business likely means that investors would see limited earnings impact from such a move,” Goldman explained. The note goes on to explain the real reason why wants to get into the low-profit car business.

“The main reason Apple and other tech companies want to be in this business is due to the large amount of time future consumers are likely to spend in self driving vehicles using information services as they make their way from point A to point B,” Goldman said.

Goldman believes that a “car as a service” subscription model could emerge down the road, “which could be of interest to Apple.” The firm has also maintained its Sell rating and $75 price target for AAPL.