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It’s been a stop-start decade for Apple’s electric car dream: swirling rumors, hires and layoffs, acquisitions, and doubt. Finally, though, this past week, it emerged that Apple will put the project out of its misery.
By itself, this would be important but not existential. Tech companies venture into and then retreat from new fields all the time. And while Apple sunk billions into its EV project, it is certainly a company that has the money to spare. Last summer, Apple reported sitting on a pile of almost $167 billion in cash — one of the largest such stashes around.
But it’s an odd moment for Apple. The cancellation of its EV is the third prong in a trifecta of — well, not failure perhaps, but certainly not the roaring success it has become accustomed to. First, its tech sector peers ushered one artificial intelligence innovation after another into the market, even as Apple offered nothing of its own. Then customers rushed to return Apple’s $3,500 Vision Pro headset before the trial period expired, many of them claiming in the process that the tech or the price tag weren’t quite satisfactory.
Now, having given up its EV ambitions, Apple is redirecting its resources into AI instead. This is, arguably, a sensible course of action. (Meta, for one, is doing the same thing.) Shareholders should be pleased. But they cannot also help but recall a time when Apple set the pace for others to follow, and created entire niches in the market out of whole cloth.
They were so spoiled by that era, in fact, that the Apple of today feels insufficient — despite being an industry titan, recording nearly $97 billion in net income last year, and enjoying the kind of stature that shareholders of other companies hungrily covet. Apple’s stock was downgraded by Barclays in January, and its investors are now demanding more disclosures about its AI work. The iPhone is still great, everyone seems to be saying — but is it enough?
A TIMELINE OF THE APPLE CAR
2014: Tim Cook, Apple’s CEO, approves Project Titan: the quest to build an electric car. The idea comes from Steve Jobs, around the time Tesla launched its first car in 2008, according to an Apple board member. Carl Icahn, an investor in Apple, approves of the project, calling the car “the ultimate mobile device.”
2015: The first reports emerge about Apple’s secret car project. The Wall Street Journal learns that the car design “resembles a minivan.” Apple is already scouting for places to test self-driving technology, including GoMentum Station, a former naval base in the Bay Area that has 20 miles of highways and city streets. Apple will aim to ship as soon as 2019, one report claims.
2017: Apple employees publish a paper about using a neural network and lidar to detect objects—the bread and butter of the self-driving car. California issues Apple a permit to test three self-driving Lexuses (Lexii?). Perhaps, though, Apple just wants to make the autonomous driving technology, rather than the car itself? Self-drive is “the mother of all AI projects,” Cook says, but adds they aren’t yet committing to any kind of product.
2018: Elon Musk reveals that he tried to sell Tesla to Apple, and that Cook wasn’t interested. Reader: Imagine, if you will, an alternate universe in which that deal went through — in which Musk had more free time than he does today.
2019: In January, Apple lays off 200 staff from the Project Titan team. In June, Apple acquires Drive.ai, an autonomous vehicle startup. Talk about conflicting signals.
2021: In the most concrete rumors yet that Apple is actually planning to sell a car, it emerges that Korean and Japanese carmakers are talking to Apple about collaborations. Some reports even indicated a manufacturing plant: Kia’s factory in West Point, Georgia. But Hyundai, Kia, and Nissan then denied that they were in discussions with Apple at all.
2022: Bloomberg reports that Apple is scaling back some of its ambitions. At least on launch, its car will drive itself only on highways, and that the first model will now come out only in 2026. The price tag will be less than $100,000, and that, if nothing else, will make it the iPhone of cars.
2024: One last tempering of expectations in January: The car will launch in 2028, and its self-driving technology will resemble the driver assistance features systems already available in other cars. Then, in February, Bloomberg reports that Apple is shutting Titan down altogether.
THE HIT MACHINE FALTERS
No public information exists about how much Apple invested in its car project over the past decade. But we do know, from its annual reports, how much its R&D spending has grown. In 2023, Apple set aside almost $30 billion for research, nearly double the amount in 2019.
Even for cash-rich companies like Apple, these soaring bills invite shareholder questions. Last year, Tim Cook argued that the expenditure was warranted, since Apple is venturing into entirely new fields like machine learning, AI, and virtual reality-ware like the Vision Pro headsets, not to mention ongoing investments in chip technology. But it’s hard to avoid the sense that Apple is also pouring money into the quest for another hit product—another iPhone, which can open floodgates of revenue for years to come.
The iPhone is still the darling of the Apple stable. In the third quarter of its 2023 fiscal year, Apple took 43% of global smartphone revenues, its highest share ever registered in that quarter of the calendar. Sales of the iPhone made up around 58% of Apple’s total revenue in the first quarter of its 2024 fiscal year. But improvements to the iPhone have become iterative, and its sales growth has slowed considerably.
The early response to the Vision Pro suggests that it won’t be the blockbuster iPhone redux product that Apple is seeking — and now we know the electric, self-driving car won’t be either. To be sure, Apple may be diverting many of its energies into AI, but it lags behind Google, Meta, and Microsoft in that particular race. Further, unlike those other three companies, Apple is still a company of hardware —of beautifully designed things that you can hold and play with. Even its AI products, whenever they arrive, will have to sit within such pieces of hardware. Now it seems that, while AI will augment Apple’s computers and phones and tablets, there are no other new devices on the horizon at all.
ONE 📲 THING
Intriguingly, Apple isn’t the only phone company to believe that its next natural step lies in the automotive space. China’s Xiaomi has an EV in the works, as does Huawei. The thesis was often stated loud and clear: The cars of the near future will be all batteries, sensors, and apps, and in that sense will merely be phones on wheels. Apple’s experience with its car project pours a certain measure of cold water on that idea, and it suggests that the “on wheels” part isn’t necessarily an easy lift — even for a company with billions of dollars of cash in its pocket.
Thanks for reading! And don’t hesitate to reach out with comments, questions, or topics you want to know more about.
Have an electric weekend,
— Samanth Subramanian, Weekend Brief editor