Apple Inc is halting its decade-long attempt to develop an electric car, as per sources familiar with the matter, marking the end of one of the company’s most ambitious projects to date.
The decision was internally communicated on Feb 27 by chief operating officer Jeff Williams and Kevin Lynch, a vice president overseeing the project, surprising the nearly 2,000 employees involved in the effort known as the Special Projects Group, or SPG.
The leadership informed the employees that the project will begin winding down, with many being reassigned to the artificial intelligence division under executive John Giannandrea to focus on generative AI projects.
The Apple car team consists of hundreds of hardware engineers and vehicle designers, some of whom may have the opportunity to seek roles in other departments within Apple. While layoffs are expected, the exact number is unclear.
Apple, headquartered in Cupertino, California, declined to comment on the decision.
Investors reacted positively to the news, causing Apple’s shares to rise after an initial decline. The stock was up around 1% to US$182.52 (RM865.14) in New York following the report.
Tesla Inc CEO Elon Musk also praised the decision, sharing a post on X with a salute emoji and a cigarette.
The decision to discontinue the project comes as a significant development for Apple, bringing an end to Project Titan, a multibillion-dollar effort aimed at propelling Apple into the automotive industry.
The project, which began around 2014, sought to create a fully autonomous electric vehicle with luxurious features such as a limousine-like interior and voice-guided navigation.
However, the project faced challenges early on, leading to changes in leadership and strategy. Lynch and Williams took over a few years ago after the departure of Doug Field, who is now a senior executive at Ford Motor Co.
Apple also encountered a cooling market for electric vehicles, with sales growth slowing down due to high prices and a lack of charging infrastructure discouraging mainstream adoption. Automakers like General Motors and Ford are shifting towards hybrid vehicles, while Tesla has warned of slower expansion this year.
Apple’s top executives made the final decision in recent weeks, following reports that the project had reached a critical juncture. Prior discussions involved delaying the car’s release until 2028 and reducing self-driving specifications.
Under the new structure, Lynch will report to Giannandrea, shifting from reporting to Williams, who also oversees software engineering for the Apple Watch.
Apple initially envisioned a car without traditional controls like a steering wheel and pedals but later abandoned that concept. The company also explored a remote command center to take over driving functions.
Recent plans for the car included a price tag of around US$100,000 (RM474,000), but concerns arose about profitability and ongoing project expenses.
Apple’s heavy investment in research and development over the past five years, totaling US$113 billion (RM535.62 billion), has led to new product categories like the Vision Pro headset. The decision to focus on generative AI aligns with the company’s long-term strategy for profitability.
While Apple has shelved projects before, the scale and duration of Project Titan set it apart, making it one of the company’s most extensive and costly endeavors.
Apple’s existing involvement in the auto industry through CarPlay software, which integrates iPhone features with vehicle controls, may see further enhancement as the company focuses on collaborations with automakers rather than direct competition.
Bloomberg Intelligence analysts view Apple’s pivot towards AI as a strategic move with greater long-term revenue potential compared to the automotive sector, indicating a shift towards sustainable profitability.
