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For a couple of years, there has been a lot of speculation that Apple was secretly working on an electric car. The effort reportedly is known as "Project Titan" and is part of a broader trend in which technology companies try to develop self-driving vehicles.

But now, according to Bloomberg, Apple is scaling back on the project and is no longer focusing on developing a car of its own. Instead, it's focusing on the technology needed to build partnerships with existing carmakers. This decision was reportedly made after months of disagreements, leadership instability, and supply-chain challenges.

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Investors who had been excited by the prospect of a self-driving Apple car may be disappointed. However, there's still a stock related to autonomous vehicles that may be worth your attention.

That company is Tesla (TSLA) - Get Tesla Inc Report . The Palo Alto, Calif.-based electric car maker generated lots of headlines last week with its announcement that every car it will make contain have the hardware necessary for autonomous driving. The company said it will take some time, however, to validate the required software and receive regulatory approval for Tesla owners can let their cars do the driving.

Founded in 2003, Tesla is young for a U.S. automaker. Even so, it has managed to create a market for its signature electric vehicles at a rapid pace, and it looks set to march ahead with its plans in the years to come.

The stock has been under pressure this year, however, and is down 17% so far in 2016. 

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Tesla shares have come under pressure because of multiple concerns. They include worries about the company's planned acquisition of SolarCity (SCTY) , about its need for capital (Oppenheimer analysts estimate a combined Tesla-Solar City will need to finance about $12.5 billion in capital expenditures by the end of 2018, according to Barron's.), about its lack of profits, about self-driving car accidents (in the U.S. and Germany) and about car-building capacity at its Fremont, Calif. factory.

These are significant challenges, but none are insurmountable, and there are plenty of bright spots for Tesla.

Recently, Tesla Motors came out with a schedule for Model 3 deliveries with respect to new orders. There are more 400,000 pre-orders for the highly anticipated model that are now slated to be delivered as early as mid-2018.

The optimism around Tesla's Gigafactory (which will make lithium-ion batteries) is steadily rising. The Gigafactory could serve as a catalyst for investor enthusiasm and also help drive down the per-kilowatt-hour (kWh) cost of Tesla's battery pack by more than 30%. Investors should expect full updates on production ramp-up and capacity capabilities during the company's third-quarter call on Oct. 26.

Further, analysts are now bullish on the automaker's ability to back its second-half delivery guidance of 50,000 cars. The third-quarter deliveries report has shown that Tesla delivered around 24,500 vehicles, a major improvement from the second quarter's 14,400 units.

All of these factors point toward the possibility that Tesla's promise to deliver 500,000 cars per year by 2018 could actually be achievable.

There's a reason why Tesla trades at a high price-to-earnings ratio of 118, based on estimated future earnings, compared with just 13 for Apple, 6.8 for Ford, and 5.6 for General Motors. Tesla has got the first-mover advantage and is clearly the "most serious and prepared contender" in the electric and self-driving segment.


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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.