Apple has abandoned its initiative to develop an electric car, faced with challenges in creating an autonomous vehicle.
The tech giant informed the 2,000 employees dedicated to this endeavour, known as Project Titan, of the cancellation, as reported by Bloomberg.
Many of those involved in the project are expected to be reassigned to artificial intelligence efforts, reflecting Apple’s strategic focus. However, there will also be some job losses.
Launched in 2014, Project Titan sought to revolutionize battery technology, significantly reducing costs, and develop advanced car software for full self-driving capabilities.
Earlier in January, it came to light that Apple had postponed the car’s launch from 2026 to 2028, scaling back its self-driving features to a level comparable with Tesla’s Autopilot. This revision meant the car would handle certain tasks like braking, lane changes, parking, and highway driving, but still require driver oversight.
The termination of Apple’s electric car project coincides with intensifying competition in the electric vehicle sector. China’s BYD has recently surpassed Elon Musk’s Tesla, becoming the top electric vehicle seller worldwide.
BYD’s ascent, driven by its competitively priced offerings, has caused concern among Western automakers. Renault’s chief, Luca de Meo, has called for Europe and Britain to adopt a joint industrial policy to promote “European champions.”
Analysts had previously questioned Apple’s rationale for entering the automotive industry. Last year, tech analyst Richard Windsor commented, “It makes no sense whatsoever for Apple to sell a car. Apple’s products typically have 40-50% gross margins, which is unlikely to be achieved with car components like seats and steering wheels.”
Apple’s decision to scrap the car project comes amid investor unease over the company’s growth prospects. Its stock price has fallen more than 4% in the past month, facing challenges on several fronts.
In the last quarter of 2023, Apple’s sales in China dropped by 13%. Its market share for phones priced above $600 declined from 75% to 71%. Particularly in China, Huawei has been cutting into Apple’s sales, especially after the release of its popular Mate 60 Pro phone.
Moreover, Apple has been contending with legal disputes over its smartwatches and issues with its Vision Pro headsets. Launched as the first major product since the Apple Watch in 2015, some Vision Pro users have returned the headsets, citing motion sickness. Apple has released guidance to help reduce these effects.
