Apple aims to begin producing an electric car as early as 2020, Bloomberg reported, citing people with knowledge of the matter.
The timeframe set for the secret project would be an aggressive target for the iPhone maker, which has little experience in car manufacturing.
Apple also hopes to give tough competition to Tesla Motors and General Motors, which are targeting to release their own electric vehicles in 2017.
One of the sources told Bloomberg that the car team already has about 200 people, and it has been ramping up hiring of experts in technologies for batteries and robotics within the past couple of months.
However, the project's deadline could be really hard to meet as even experienced automakers typically spend five to seven years developing a new vehicle before bringing it to the market, according to industry experts.
"If you're starting from scratch, you're probably talking more like 10 years. A car is a very complex technological machine," Bloomberg quoted Dennis Virag, president of Automotive Consulting Group, as saying.
Apple's rumoured car project, which is known internally as Titan, is based a few miles away from the company's global headquarters in Cupertino, California. A lab acting as home for Titan was set up last year, shortly after the new iPhone 6 and Apple Watch were announced, the Financial Times reports.
In further evidence of the project, Apple has been sued by electric-car battery maker A123 Systems for allegedly poaching its engineers to build a battery division.
Apple and five former employees are named defendants in the lawsuit filed earlier in the Massachusetts federal court.
Around June 2014, Apple began aggressively poaching A123 engineers who are leading some of the company's most critical projects, according to the lawsuit. The engineers quit A123 to pursue similar programmes at Apple, in violation of their employment agreements, the lawsuit claims.