On Tuesday Eastern Time, a news shocked the global electric vehicle industry: it is rumored that Apple will abandon its ten-year electric vehicle development plan and some R&D personnel will shift to the artificial intelligence department.
The news that Apple has abandoned car manufacturing shows the difficulty that technology companies face in cross-border car manufacturing, and also indirectly reflects the bleak situation currently facing the global electric vehicle market.
But at the same time, as this tech giant abandons car manufacturing, many car manufacturers such as Tesla can finally breathe a sigh of relief. This means that in the current slowdown in the growth of the electric vehicle market, these companies are facing fewer competitive threats, and more excellent engineering talents can flow from Apple to the market.
The dismal electric vehicle industry lacks a major competitor
Over the past year, the global electric vehicle market has not been optimistic: Tesla has been lowering car prices and warning of a decline in market demand; Ford expects a decline in demand for electric vehicles and has controlled its investment plan; General Motors has postponed plans to open an electric pickup truck factory in the suburbs of Detroit; Mercedes Benz in Germany has also abandoned its plan to only sell electric vehicles by 2030.
However, start-up electric vehicle companies have been struggling with dismal sales and heavy cash consumption, facing an even more severe situation: Rivian expects production to remain stable this year and announced layoffs, resulting in the company's stock price hitting its largest historical decline last week; Lucid Group Inc. will only produce 9000 cars this year, which will further weaken its financial reserves. In China, the recent news of Gaohe Automobile announcing a 6-month shutdown has also attracted widespread attention.
Morgan Stanley analyst Adam Jonas pointed out in a recent report, "The global development momentum of electric vehicles is weakening, and market supply has exceeded demand."
Now, on this crowded and dim stage, these car companies have at least one good news: they can eliminate a strong competitor - Apple, and it is also a technology giant with high-end technology and huge cash.
"They may have breathed a sigh of relief," Gartner Inc. analyst Mike Ramsey said. "Even when Apple first planned to enter this market, it scared everyone to death."
Making cars is far more difficult than making mobile phones?
Jeff Schuster, Global Vice President of Automotive Research at consulting firm GlobalData, said that Apple's abandonment of car manufacturing is another example of the technology industry underestimating the difficulty of disrupting the automotive industry.
"Everyone from that world (the technology industry) looks at it (the automotive industry) and thinks, 'Oh, these outdated and outdated things, we can come in, it's easy, what's so difficult? We produce phones, we have all these technologies, we can take over it,' Schuster said. 'And then, out of ten, most people will find it more challenging, dynamic, and complex than they imagine.'"
And automotive industry analyst Soye Merritt commented:
"Apple spent 10 years trying to manufacture electric cars with $162 billion in cash reserves, but ultimately came to the conclusion that it was too difficult and the profits were too small - even if the car was priced at $100000. Initially, Apple wanted it to become a fully autonomous car, but now they have no fleet, real-world data, or experience to achieve this goal. Only two large American car manufacturers have never gone bankrupt: Tesla and Ford."
Tesla's CEO also responded to this comment on X, stating that car companies are struggling to survive and bankruptcy has become the norm: "The natural state of a car company is death."
Is Tesla the biggest winner?
After Apple announced its abandonment of car manufacturing, Tesla may be the biggest beneficiary of this event. Gartner analyst Ramsey said that after continuously lowering prices for over a year, the last thing Musk wants to see now is a similarly high-tech attractive competitor in Silicon Valley.
He said, "They (Tesla) were undoubtedly in the most disadvantageous position... Tesla has always been seen as a car that showcases its identity, and Tesla has benefited greatly from this positioning. And Apple electric cars can definitely be seen as a tool for showcasing their identity."
To celebrate Apple's abandonment of car manufacturing, Musk shared the news on X, along with a tribute emoji and a cigarette.
In addition, sources have revealed that after Apple abandons car manufacturing, hundreds of hardware and automotive engineers in its electric vehicle development team have the opportunity to apply for jobs in other project teams, and may also face layoffs.
Brad Holden, founder of executive search firm Holden Richardson, said that after Apple abandons car manufacturing, many of its excellent talents in the electric vehicle division may shift to other car manufacturers, which will be good news for other car companies.