The reports say that Apple has been recruiting experts in vehicle design and automative technology to work at a top-secret research lab.
Steve Zadesky, who led teams which developed the iPod and iPhone, is reportedly heading up the vehicle development program, which was established late in 2014.
Zadesky has been recruiting top executives and designers from Mercedes, although such research does not guarantee that a product will come to the market.
On Friday, the Wall Street journal reported that Zadesky's team had produced a design for an electric-powered minivan under the code name Project Titan.
While Apple is known for its iconic designs, it lacks direct manufacturing capacity, suggesting it will have to build partnerships with established companies, many of whom will already have patents for technology in the field.
One such partner could be Magna Steyr in Austria. A well-placed source inside Apple suggests that Zadesky has been making regular trips to Austria in relation to the project.
Magna Steyr is a century-old but little-known Austrian vehicle manufacturing OEM, which has produced more than a million vehicles for BMW - including the BMW X3, MINI Countryman and MINI Paceman - and also produces the Mercedes G-Class at its plant in Graz.
While Apple has developed software - known as CarPlay - that integrates entertainment within modern vehicles such as the newest Ferraris, Daimlers and Volvo, it would be a huge leap to begin manufacturing, even with an experienced partner, according to a senior industry figure.
“Three months ago I would have said it was CarPlay,” said one person who has worked closely with Apple for many years, referring to Apple’s infotainment system. “Today I think it’s a car.”
Apple has declined to comment on the reports.
Apple's CEO Tim Cook has said that the automotive industry is an area in which he feels Apple can make a bigger impact. At a Goldman Sachs technology conference in San Francisco this week, he said CarPlay was one of three new technology platforms Apple launched last year that are “key to our future”, alongside HealthKit and HomeKit.
“We’ve taken iOS and extended it into your car, into your home, into your health,” Mr Cook said. “All of these are really critical parts of your life and none of us want to have different platforms in different parts of our lives.”
Earlier this week Business Insider reported that it had received an email from someone claiming to be an Apple employee, which said the iPhone maker’s latest project would compete with billionaire Elon Musk's Tesla vehicles.
The person said Tesla employees were "jumping ship" to work at Apple.
"Apple's latest project is too exciting to pass up," the person said. "I think it will change the landscape and give Tesla a run for its money."