After a decade of secret research and development, Apple finally decided to terminate its electric vehicle program. According to Bloomberg News, some of the employees involved in the project will be redeployed to the company's artificial intelligence department.
According to Reuters, Ben Bajarin, CEO of Innovation Strategy Consulting, said that if Apple does abandon its electric vehicle plans, this move indicates that the company will pay more attention to the development of general AI, which will further enhance investors' confidence in Apple's determination and strength in the AI platform competition. Although Apple has not yet made significant large-scale moves in the field of AI, this strategic adjustment is particularly critical in the face of competitors such as Google's parent company Alphabet and Microsoft, which have already taken the lead in the AI market.
About a decade ago, Apple launched its electric vehicle project and had considered launching its first electric vehicle in 2024 or 2025. However, the company and its CEO Tim Cook have never publicly acknowledged specific plans to build cars, using the term "autonomous driving system" as a term, and have not announced the exact amount of investment in the automotive sector. CNBC reported that Apple's R&D investment in 2023 will reach $30 billion, an increase of 14% from the previous year, of which billions of dollars will be invested in electric vehicle projects.
Unfortunately, in the current context of weak market demand due to the Federal Reserve's continuous interest rate hikes, and the electric vehicle industry is generally facing layoffs and production cuts, Apple's electric vehicle project seems to have come at an inopportune time. Electric vehicle manufacturers such as Tesla have cut expenses and adjusted their product strategies, while Apple's electric vehicle program has never met expectations.
According to Bloomberg insiders, Apple has officially notified employees that it will stop the electric vehicle manufacturing project, a decision that has surprised nearly 2,000 project team members. Some employees will move to the AI department, and those automotive hardware engineers and designers who don't meet the needs of the existing department may be at risk of layoffs. Apple's chief operating officer, Jeff Williams, and Kevin Lynch, Apple's head of the car project, made it clear to the team that the gradual end of the Titan project marks that artificial intelligence will be the focus of Apple's next phase of development.
Looking back over the past decade, Apple's ambitions to enter the electric vehicle market are not small. When the development of electric vehicles began in 2014, the goal was to create a luxury model with Level 5 full autonomous driving capabilities. During this period, Apple recruited a large number of industry elites, including experts and technicians from Tesla, Ford and other companies. However, due to a variety of reasons, such as management disagreements on the development goals of autonomous driving technology, as well as challenges in the technical and policy environment, Apple's "Titan" project has made bumpy progress, changed its leaders several times, and spent billions of dollars but still failed to achieve a breakthrough.
A month ago, Bloomberg reported that the Apple car project was at a critical turning point, and that Apple had tried to save the project by delaying the launch of the product, which was originally scheduled for 2025, to 2028 and downgrading the self-driving technology from Level 4 to Level 2. However, after much deliberation, Apple finally made the difficult decision to abandon its plans to build a car.
In addition to the slow progress of product development, Apple's senior management is also concerned that the continued investment in this project with an unknown return cycle will have a negative impact on the company's operating performance. And even if a product is successfully launched, its profit margins may not match the high level of Apple's existing products. At this point, Apple has announced the end of an era, and at the same time, it has opened a new chapter in the exploration of a new era of artificial intelligence.