On February 28th, the automotive industry was flooded with reports that Apple had cancelled its electric vehicle project. According to insiders cited by the media, Apple has cancelled its ten-year electric vehicle plan and abandoned one of its most ambitious projects in history.
According to multiple foreign media reports, Apple has disclosed this decision internally, which surprised nearly 2000 employees of the project. Some employees of Apple's automotive hardware will be laid off, while others will be transferred to Apple's artificial intelligence (AI) department. Apple has not yet commented on this news.
As early as 2014, when new forces in the automotive industry emerged like mushrooms after rain, Apple also began exploring electric vehicle projects, which were known as the Titan project. It is reported that at its peak, Apple had over 5000 R&D personnel for this project alone. With Apple's past success in the consumer electronics field, the automotive industry also has high expectations for its cross-border car manufacturing.
Tesla CEO Musk also revealed that during the most difficult period of the Model 3 project, he approached former Apple CEO Tim Cook, hoping that Apple could acquire a portion of Tesla's equity (approximately 10%), but Tim Cook refused.
After it was revealed that Apple had cancelled its electric vehicle project, Musk immediately forwarded the news on public channels, accompanied by expressions of "salute" and "smoke".
Subsequently, many executives from Chinese car companies also came to the scene for heated discussions. Li Xiang, CEO of Ideal Automobile, stated that Apple's decision to abandon car manufacturing and focus on artificial intelligence is an absolutely correct strategic choice, and the timing is also appropriate. Moreover, artificial intelligence will become the top entry point for all devices, services, applications, and transactions, making it a battleground for Apple. Apple has made it a to C artificial intelligence, with a potential market value of $10 trillion. Even if it fails, its market value could still reach $1 trillion.
Jiyue CEO Xia Yiping also shares the same feeling, stating that Apple's focus on AI is definitely the most correct choice, because artificial intelligence is the decisive battle in the technology industry's ultimate battle.
Xiaopeng Motors CEO He Xiaopeng expressed surprise in a post, saying, "Last year we discussed that all new entrants to the automotive industry will play cards by 2024, except for Apple. The decade after 2024 will enter the knockout stage and All Star Game. But I didn't expect Apple to play such a card in 2024."
Xiaomi Group Chairman and CEO Lei Jun also expressed shock, further stating that Xiaomi is well aware of the difficulty of car manufacturing, but still made an extremely firm strategic choice three years ago.
In the past few years, with the arrival of the wave of "new four modernizations" in the automotive industry, many technology companies have smelled commercial opportunities in this area and have personally or deeply participated in car manufacturing, including Huawei, Xiaomi, Baidu, Apple, etc. Among them, Huawei has built two major brands, Wenjie and Zhijie, through the intelligent car selection model. Xiaomi's first mass-produced car, the SU7, is expected to be officially delivered in the second quarter of this year, Baidu has become a supplier of the Jiyue brand.
But the other side of the opportunity is the challenge, making cars is not an easy task and requires huge investment. Previously, NIO CEO Li Bin pointed out that the funding threshold for car manufacturing is 40 billion yuan. It took Tesla 16 years to truly make money in car manufacturing. Based on this, many technology companies have resolutely abandoned car manufacturing, such as Didi, which transferred the relevant assets and research and development capabilities of its intelligent electric vehicle project to Xiaopeng Motors last year.
From the perspective of the capital sector, the leverage and capital boom in the new energy sector have accelerated and cooled as early as 2021. By 2023, the market value of listed car companies has gradually returned to rationality. There are already different opinions in the industry on whether simply making cars is still a good business.
Berkshire Hathaway CEO Warren Buffett stated in May last year that the automotive industry has historically been very difficult. Although the automotive industry will not disappear, it will definitely be different from what it is now in 5 to 10 years, both in terms of automotive architecture and market structure. The deployment of capital and risks are bound to occur.