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Apple Car:

Who Led the Effort?Management TurnoverApple Cancels Electric CarCarPlay
StrategyExec Leaves for Rivian
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APPLE TO WIND DOWN ELECTRIC CAR EFFORT AFTER DECADELONG ODYSSEY

* Executives tell staff to end work on endeavor known as Titan
* Employees on some car teams will move to Apple’s AI division

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Apple Pulls Plug on Electric Car Plans
Apple Pulls Plug on Electric Car Plans
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WATCH: Apple is abandoning its electric-car plans, according to people with
knowledge of the matter. Mark Gurman reports.

Source: Bloomberg
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By Mark Gurman
February 27, 2024 at 7:59 PM GMT+1
Updated on
February 27, 2024 at 10:16 PM GMT+1
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5:42

Apple Inc. is canceling a decadelong effort to build an electric car, according
to people with knowledge of the matter, abandoning one of the most ambitious
projects in the history of the company.

Apple made the disclosure internally Tuesday, surprising the nearly 2,000
employees working on the project, said the people, who asked not to be
identified because the announcement wasn’t public. The decision was shared by
Chief Operating Officer Jeff Williams and Kevin Lynch, a vice president in
charge of the effort, according to the people.

Expand

Jeff Williams, Apple’s chief operating officer, has helped oversee the car
effort.Photographer: David Paul Morris/Bloomberg

The two executives told staffers that the project will begin winding down and
that many employees on the car team — known as the Special Projects Group, or
SPG — will be shifted to the artificial intelligence division under executive
John Giannandrea. Those employees will focus on generative AI projects, an
increasingly key priority for the company.

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The Apple car team also has several hundred hardware engineers and vehicle
designers. It’s possible they will be able to apply for jobs on other Apple
teams. There will be layoffs, but it’s unclear how many.

Apple, based in Cupertino, California, declined to comment.

The move came as a relief to investors, who sent Apple shares climbing Tuesday
after Bloomberg reported the news. The stock was up about 1% at $182.63 by the
close in New York.

Elon Musk, head of Tesla Inc., also celebrated the move. He shared a post on the
X social media site with a saluting emoji and a cigarette.

The decision to ultimately wind down the project is a bombshell for the company,
ending a multibillion-dollar effort called Project Titan that would have vaulted
Apple into a whole new industry. The tech giant started working on a car around
2014, setting its sights on a fully autonomous electric vehicle with a
limousine-like interior and voice-guided navigation.

But the project struggled nearly from the start, with Apple changing the team’s
leadership and strategy several times. Lynch and Williams took charge of the
undertaking a few years ago — following the departure of Doug Field, now a
senior executive at Ford Motor Co.

Apple was still years away from producing a car and contemplated many different
designs. Beyond the look of the vehicle, cracking self-driving technology was a
major challenge. Apple had road-tested its system since 2017 using a Lexus SUV
exterior, putting dozens of vehicles on roads in the US. The company also tested
more secretive components on a gigantic track in Phoenix that was once owned by
Chrysler.

In the end, Apple was facing a cooling market for EVs. Sales growth lost steam
in recent months after high prices and a lack of charging infrastructure
discouraged mainstream buyers from shifting to all-electric vehicles. General
Motors Co. and Ford are pivoting to producing more hybrid vehicles after
confronting lackluster EV demand and manufacturing bottlenecks, and automakers
across the industry are slashing battery-electric car prices, production targets
and profit forecasts.

Even Tesla, the pioneer of the EV revolution in the US, has warned its rate of
expansion will be “notably lower” this year. Domestic EV sales growth will
decelerate to 11% this year from an estimated 47% growth rate in 2023, according
to a forecast by UBS AG.

Read More: Electric Vehicle Sales Growth Is Slowing. Here’s Why: QuickTake

Apple’s most senior executives finalized the decision in recent weeks, according
to the people. It comes just a month after Bloomberg News reported that the
project reached a make-or-break point. The most recent approach discussed
internally was delaying a car release until 2028 and reducing self-driving
specifications from Level 4 to Level 2+ technology. Apple had employees from
across the car industry working on the project, including designers from Aston
Martin, Lamborghini, BMW and Porsche.

Under the new arrangement, Lynch will report to Giannandrea. He previously
reported to Williams, who also has overseen software engineering for the Apple
Watch.

Apple once envisioned creating a car without a steering wheel and pedals, but it
scrapped that notion earlier. The company also spent time working on a remote
command center that could take over for a driver.

Most recently, Apple had imagined the car being priced at around $100,000. But
executives were concerned about the vehicle being able to provide the profit
margins that Apple typically enjoys on its products. The company’s board was
also concerned about continuing to spend hundreds of millions of dollars a year
on a project that may never see the light of day.

Apple continues to invest heavily in other areas. The company spent $113 billion
on total research and development over the past five years, with an average
annual growth rate of about 16%. The company also recently launched the Vision
Pro headset — its first new product category in almost a decade — and has built
up that business.

The company has scrapped projects before, including a plan to make a TV set that
was abandoned around 2015. But few endeavors have lasted this long, involved so
many employees or racked up billions of dollars in expenses.

Read this next: Biden’s EV Dreams Are a Nightmare for Tesla and the US Car
Industry

So far, Apple’s biggest push into the auto industry was its CarPlay software,
which lets drivers access iPhone features like maps and Siri. It’s being
redesigned to integrate more deeply with vehicle controls and entertainment
systems. By not competing with automakers, Apple could give a boost to that
software, helping spread it to more models.

Ultimately, focusing on AI may be a better bet, Bloomberg Intelligence analysts
Anurag Rana and Andrew Girard said in a note. “Apple’s decision to abandon
electric cars and shift resources toward generative AI is a good strategic move,
we believe, given the long-term profitability potential of AI revenue streams
versus cars.”

— With assistance from Gabrielle Coppola

(A previous version of the story corrected the timing of an EV forecast.)

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