Tesla (TSLA) has chosen a more difficult path than Apple (AAPL) when it comes to autonomous cars, and it will pay off in the long run.
Tesla has struggled to create a profitable auto manufacturer since its inception in 2003 and is still working hard to produce a fully autonomous vehicle in the next two years. Meanwhile, Apple announced last week that rather than manufacturing an Apple-branded car, it will simply build the autonomous technology that will power cars made by other companies.
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This was the right decision for Apple because creating the technology is the best way to use its strengths, including optics and machine learning, Loup Ventures founder Gene Munster said. However, while Apple seems to be getting off easy with this option, Tesla will be seen as the ultimate winner when it comes to autonomous cars, he said.
"Now with Apple out, Tesla is in a good position because it will be hard for it to be outdone by anyone in the space," he noted.
While Tesla CEO Elon Musk may miss his original target to get an autonomous Tesla-branded vehicle to market in two years, Munster said he is as optimistic as ever that Tesla will usher in a new paradigm in the transportation sector. Demand for the Model 3 has been encouraging despite cancellations, he noted. Musk said that he sees Model 3 demand reaching more than 700,000 units per year.
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