Red Star Capital Bureau reported on February 28th that on the afternoon of February 27th Eastern Time, renowned technology journalist Mark Gurman revealed on social media that Apple Inc. (AAPL. US) has decided to cancel its electric vehicle project and shift the team towards generative artificial intelligence.
According to insiders, Apple's Chief Operating Officer Jeff Williams and Vice President in charge of car manufacturing Kevin Lynch announced the decision internally on Tuesday, "surprising nearly 2000 employees of the project."
Mark Gurman reveals
Apple abandons car manufacturing
Musk, Lei Jun, Li Xiang, He Xiaopeng responded
According to Gulman, two executives told employees that the project will begin to gradually end, and many employees will be transferred to the artificial intelligence department to focus on generative artificial intelligence projects, which is an increasingly important priority for the company. The Apple automotive team also has hundreds of hardware engineers and automotive designers who may apply for work from other Apple teams. Apple will also lay off employees, and the number of layoffs is currently uncertain.
Apple declined to comment on the news of abandoning electric vehicles. On Tuesday, during the closing session of the US stock market, Apple's stock price, which had fallen nearly 0.9% during the session, rebounded and rose more than 1% at one point, closing up 0.81% at $182.63 per share, with a market value of $2.8 trillion.
Tesla (TSLA. US) CEO Elon Musk responded with a "tribute" and "cigarette lighting" expression to Apple's cancellation of car manufacturing.
Musk responds
Lei Jun, the chairman of Xiaomi Group (01810. HK), said that he was shocked to see the news that Apple had given up building cars. Xiaomi's strategy is "people, cars, and the whole ecosystem". Three years ago, he made an extremely firm strategic choice to build a good car for Rice noodles conscientiously.
"Apple's decision to abandon car manufacturing and focus on artificial intelligence is an absolutely correct strategic choice, and the timing is also appropriate," said Li Xiang, CEO of Ideal Auto (02015. HK/LI. US), on Weibo
Xiaopeng Automobile Chairman He Xiaopeng stated that last year there was a discussion that all new entrants to the automotive industry would be listed within 2024, except for Apple. In the ten years after 2024, Apple will enter the knockout stage and All Star Game, but I didn't expect Apple to play such a card in 2024.
Electric vehicle analyst Soye Merritt commented, "Apple spent 10 years trying to manufacture electric vehicles 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 priced at $100000. Initially, Apple hoped it would be a fully autonomous car, but they had no fleet, real-world data, or experience to achieve this goal.". Only two large car manufacturers in the United States have not gone bankrupt: Tesla and Ford
Spending 10 years and investing billions of dollars
Even before the release of the iPhone, Apple executives had considered developing cars and had met with representatives from car manufacturers. But with the success of the iPhone, Apple no longer talks about making cars.
In 2013, Apple launched the "iOS in the car" program, which involved in in car systems.
In 2014, Apple officially launched the Titan project, a car manufacturing project, announcing that it would invest billions of dollars in the development of electric vehicles with autonomous driving capabilities. Later, a large amount of money was spent poaching from companies such as Google, Mercedes Benz, and Tesla to form a core team, including former Tesla Vice President Chris Porritt. Musk once publicly referred to Apple as Tesla's grave: "Any Tesla talent dug up by Apple will lead to mediocrity."
Due to Apple's repeated swings in the route and direction of car manufacturing, frequent changes in responsible personnel, and constant departure of core figures, the "Titan" project has come to a halt several times. According to incomplete statistics from the Red Star Capital Bureau, Apple has replaced four car makers, including Steve Zadesky from Ford, Apple Mac executive Bob Mansfield, Tesla Senior Vice President of Engineering Doug Field, and most recently, Apple Watch manager Kevin Lynch.
In March 2022, Guo Minggui, an analyst at Tianfeng International, stated that "the Apple Car team has been disbanded for some time. If we want to mass produce Apple Cars in 2025, we need to restructure the team within 3 to 6 months." He mentioned that Apple hopes to launch smart car products in 2025 and reorganize the development progress and goals of autonomous driving.
In December 2022, there were reports that Apple would postpone its target time for launching electric vehicles to 2026. Apple has lowered its expectations for autonomous driving capabilities from the original planned Level 5 to Level 4.
In January of this year, it was reported that Apple had postponed the release of smart cars to 2028, lowered the level of autonomous driving to L2, and aligned its products with Tesla's existing products. According to the report, if Apple is unable to launch in 2028, it may "seriously reconsider the existence of the project.".
The biggest achievement Apple has made in the automotive industry so far is the CarPlay software. Analysts Anurag Lana and Andrew Gillard stated in a report, "Given the revenue stream of artificial intelligence relative to the long-term profitability potential of cars, we believe that Apple's decision to shift resources from electric vehicle projects to generative artificial intelligence is a wise strategic decision."
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