The Apple iCar: How to ProfitThe Apple iCar: How to Profit By Jason Simpkins | Friday, February 27th, 2015 Elon Musk made a lot of headlines when he said Tesla Motors (NASDAQ: TSLA) would be as big as Apple (NASDAQ: AAPL) in 10 years. But really, Apple is the company that's chasing Tesla. That is, Apple hopes to have its own electric car on the market by 2020. There's even speculation that Apple tried to buy Tesla last year. And a future tie-up between the two companies can't be ruled out. The whole thing is a massive profit opportunity for investors, if they know where to look. And we've got a few ideas for you. But first, let's take a closer look at the iCar. Project Titan According to Bloomberg, Apple has been secretly working on a car for years. J. Crew CEO and Apple board member Mickey Drexler suggested Steve Jobs got the ball rolling before he passed. “Steve’s dream before he died was to design an iCar,” he said. “It would have been probably 50% of the market. He never did design it.” Well, Apple has carried on, with Tim Cook green-lighting the iCar project last year. Code-named “Project Titan,” the goal is to release an electric car in five years. That puts Apple on a collision course with other automakers — General Motors and Tesla — as well as its Silicon Valley rival, Google (NASDAQ: GOOG). Indeed, Google has been working on an autonomous, self-driving car since 2010. Meanwhile, Tesla and GM each aim to release an electric car that costs less than $40,000 and is capable of travelling more than 200 miles on a single charge. Apple is right behind them. In fact, it allegedly tried to pull even by kicking the tires on a Tesla buyout. The San Francisco Chronicle broke the story last year, when it reported that Apple's head of M&A met with Elon Musk — something Musk himself confirmed to Bloomberg. "We had conversations with Apple," Musk said. "I can't comment whether those revolved around an acquisition." Sounds like it did. Apple is one of the few, and maybe the only company that could pull that off. Now the largest U.S. company ever, valued at $750 billion, Apple posted a record $18 billion profit last quarter. It generates $200 billion annual revenue and has $178 billion in cash just sitting around. Of course, with no sale imminent, the company has been content to simply poach Tesla's employees. Musk says Apple has been offering his workers $250,000 signing bonuses and 60% salary increases to jump ship. Yet he made Apple's task even easier, when he gave away patents on Tesla technology last summer. “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology,” he said in a blog post. iCar Inside Charging Ahead In addition to snagging Tesla employees, Apple has also been poaching workers from Massachusetts-based battery maker A123 Systems LLC. Apple hired five people from A123, as well as other battery experts from LG Chem Ltd., Samsung Electronics, Panasonic Corp., Toshiba Corp., and Johnson Controls. Indeed, the cornerstone of Apple's car will be the battery. You see, the problem with electric cars is that long-running batteries are incredibly expensive. Hence, the high cost of Tesla's current crop of automobiles. A Tesla Model S starts at about $61,000. To combat that cost, Tesla is building a huge new mega-factory, a “Gigafactory” out in Nevada. Apple could go that route, but it would probably be better served by simply building a better battery — one that's more potent and less expensive. If it can do that, it'll surpass its competitors. If not, then it could hit a wall given the head start enjoyed by Tesla and other auto companies, which already have the infrastructure and manufacturing capacity in place. So what's the investment strategy here? Buy Apple and Tesla? Not so fast... High-Speed Investments A better way would be to invest in the technology and production. Take Tesla's Gigafactory, for instance. This is a massive, $5 billion manufacturing plant that will build enough automotive-grade lithium-ion batteries for 500,000. Even if Tesla can't sell those cars, someone will buy the batteries. So rather than stock up on Tesla, you might invest in graphite. Indeed, the sheer volume of Tesla's battery production will create a graphite shortage, opening huge profit opportunities for miners. Two prominent players include Graphite One (OTC: GPHOF, CVE: GPH) and Great Lakes Graphite (NYSE: GLK). And Nick Hodge has an even better graphite opportunity that you can read about right here. Better still, Nick just recommended a brand new, cutting-edge tech stock to his Early Advantage subscribers. This company is a pioneer in wireless electricity. Basically, it's found a way to charge mobile devices like tablets and smartphones without plugging them in. Obviously, this technology is huge for electric cars. Just imagine pulling your new iCar into your garage and having it charge right up without having to plug it in anywhere. In fact, the company has already signed on with Foxconn, Apple's key supplier. The bottom line: Apple is thinking outside the box here, and you should too. Get paid, Jason Simpkins Signature Jason Simpkins follow basic@OCSimpkins on Twitter Jason Simpkins is a seven-year veteran of the financial publishing industry, where he's served as a reporter, analyst, investment strategist and prognosticator. He's written more than 1,000 articles pertaining to personal finance and macroeconomics. Simpkins also served as the chief investment analyst for a trading service that focused exclusively on high-flying energy stocks. 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