The New York Times just reported that Apple has teamed with Volkswagen to retrofit some vans for use in a self-driving shuttle service for Apple employees. But the project will miss an end-of-2018 deadline, and there's no guarantee the Apple-Volkswagen partnership will expand beyond it. In addition, the NYT reports that Apple's partnership talks with automakers such as BMW, Mercedes-Benz and Nissan have faltered due to the automakers' unwillingness to give Apple the kind of control it wants.
Meanwhile, Alphabet's (GOOGL - Get Report) Waymo has a giant test fleet that has racked up over six million miles of real-world driving, and has begun offering rides in driverless cars along certain routes in the Phoenix area. General Motors (GM - Get Report) and other incumbent automakers are also making self-driving investments, as are Intel (INTC - Get Report) and Nvidia (NVDA - Get Report) , both of which have a slew of partnerships with automakers.
All of this raises the question of whether Apple should use M&A to further its self-driving efforts. Buying Tesla (TSLA - Get Report) would turn Apple into a major electric maker overnight and also provide it with Tesla's Autopilot platform. But Tesla's financial profile leaves a lot to be desired, and a deal would be quite expensive even if Elon Musk was willing to sell. Buying one or two self-driving startups would be much cheaper, albeit less ambitious.
No matter what Apple opts to do, however, it's best if Tim Cook's company decides quickly.