Key Points:
- Apple cancels its decade-long electric car project, Project Titan, opting to shift focus to its AI division.
- Employees initially working on the electric car initiative will be reassigned to strengthen Apple’s capabilities in artificial intelligence.
- The strategic move aims to position Apple as a more prominent player in the competitive AI landscape.
- Industry challenges, including high-interest rates impacting consumer sentiment, contribute to Apple’s shift from electric vehicles.
According to a source familiar with the matter, Apple has abandoned its plans for an electric car in a significant strategic shift. The decision comes a decade after Apple initiated its ambitious electric car project, known internally as Project Titan. This move reflects Apple’s pivot from the challenging electric vehicle (EV) market to prioritize artificial intelligence (AI) development.
Apple’s shares (AAPL.O) responded with a 0.7% increase during afternoon trading, rebounding from earlier losses. According to Bloomberg News, which first reported the development, employees who were part of the electric car initiative will be reassigned to bolster Apple’s AI division, a move aimed at capitalizing on the company’s expertise in AI technology.
Ben Bajarin, CEO of consulting firm Creative Strategies, commented on the shift, stating that if the news is true, Apple’s renewed focus on AI, particularly GenAI, should instill optimism among investors about the company’s competitiveness at a platform level in the AI space.
Unlike tech giants such as Alphabet (GOOGL.O) and Microsoft (MSFT.O), which have aggressively embraced AI, Apple has been relatively restrained in its AI pursuits. The reallocation of resources signals Apple’s intention to play catch-up in the rapidly advancing AI landscape.
The decision to abandon the electric car project aligns with broader challenges faced by the EV industry, including the impact of high interest rates on consumer sentiment and a slowdown in demand for electric vehicles. Major automakers, including industry leader Tesla (TSLA.O), have recalibrated their strategies, with some diverting focus from fully battery-powered cars to hybrid models.
Project Titan, initiated by Apple ten years ago, initially generated considerable excitement in Silicon Valley amid a surge of interest in self-driving vehicles. Reuters reported in 2020 that Apple was contemplating the release of an electric vehicle by 2024 or 2025. However, progress had been inconsistent, even predating the disruptions caused by the COVID-19 pandemic.
2019, Apple restructured its software approach, resulting in the layoffs of 190 workers associated with Project Titan. Additionally, the design concept for the envisioned electric car changed, evolving from a radical, autonomous vehicle without a traditional steering wheel to a more conventional car featuring advanced driver-assistance features.
