Shares of Apple Inc rose 3% in pre-market trading on Tuesday, a day after Reuters exclusively reported that the iPhone maker is aiming to produce a passenger vehicle by 2024 with its own battery technology.
Central to the company's strategy is a new battery design that could "radically" reduce the cost of batteries and increase the vehicle's range, Reuters reported.
"If Apple has achieved a battery breakthrough, this could serve as a driver to finally move forward with production given battery costs are one of the main obstacles to mass adoption of EVs," Evercore analyst Amit Daryanani wrote.
The company's shares rose 2.9% to $131.9, on track to add more than $62 billion to its market valuation if current gains hold through Tuesday's trading session.
It remains unclear who would assemble an Apple-branded car, but sources have said they expect the company to rely on a manufacturing partner to build vehicles.
"It is clear to us that Apple has ambitions in the transportation space, which could result in meaningful revenue for the company, the emergence of Tesla's first true competitor, and further evidence that traditional auto is in a tight spot, absent any partnership with a tech giant," wrote Gene Munster, managing partner at Loup Ventures.