Chancellor Angela Merkel's governing party is seeking to help German carmakers and technology companies better compete with Silicon Valley. Merkel's bloc is working on legislation to advance the move toward driverless cars, according to a policy paper provided by two lawmakers who asked not to be identified because the draft isn't public. The goal is to present a plan before the Frankfurt auto show in September.

"We never underestimate any competition," said Ian Robertson, Bayerische Motoren Werke AG's sales chief. "The entry barriers, which were in the past maybe more substantial, are now slightly lower. But at the same time, the complexities of the car industry are still there as well."

An experienced automaker typically spends five to seven years developing a new vehicle from scratch, with just the testing phase needed to get regulatory approval often taking three years. Analysts estimate for a company from outside the industry to build a car could take a decade.

Apple funding

Apple, which posted record profit of $18 billion during the past quarter, in any case has the funds to do it. The Cupertino, California-based company has $178 billion in cash and CEO Tim Cook has been pushing the iPhone maker to enter new market segments to further envelop users' digital lives with Apple's products and services.

"The traditional thinking in the automotive industry isn't suited to exploit the opportunities in the Internet community," Wolfgang Ziebart, Jaguar Land Rover's head of engineering, said in an interview. "If you need committees and so on to make decisions, then you've lost before you started."

Apple's foray into cars follows a path it's taken to break into other industries. The company wasn't the first to make a digital-music player or smartphone, and only entered those markets once it had a compelling product. Google says it's seeking partners to help realize co-founder Sergey Brin's vision of safer and more efficient mobility.