About a decade ago, Apple CEO Tim Cook traveled to Munich, Germany to check out BMW. According to two people familiar with the matter, Cook spent several days touring BMW’s factories and design studios.
Cook said at the time that Apple could actually do BMW’s engineering and production capabilities, which shocked a BMW executive. As it turns out, Cook was wrong.
On Tuesday, Apple told employees inside the company that it would abandon its decade-long development of an electric car project and shift its R&D funding and staff to generative artificial intelligence.
Titanic disaster
Apple’s car is a secret project, internally codenamed “Titan” (Titan). However, over the past decade, many of the employees working on the project have given it a less flattering name: Titanic Disaster. They knew that the project was likely to fail.
Before the Apple Car project was terminated, it was canceled and restarted several times, losing hundreds of employees in the meantime. As leadership disagreed on the direction of the Apple Car, it was most positioned as an electric car to compete with Tesla, and later evolved into a self-driving car to compete with Google’s unmanned vehicle sister company, Waymo.
When the project was terminated on Tuesday, Apple had already burned more than $10 billion on it, according to six people involved in the development of the Apple Car over the past decade. The Apple Car is back to square one, and its final goal was to be an electric car equipped with driver-assistance features that rivaled Tesla’s.
The failure of the Apple Car project proves that Apple has struggled with new product development since the death of founder Steve Jobs in 2011. The Apple Car project went through four different heads and multiple rounds of layoffs. But it fell flat on its face and ultimately failed, in large part stemming from the fact that developing software and algorithms for self-driving cars was just too hard.
Why develop the Apple Car?
Bryant Walker Smith, an associate professor at the University of South Carolina’s School of Law and Engineering, who briefly discussed their project with Apple in 2015, talked a bit about his thoughts on the Apple Car.
“When the project started, Apple had a certain amount of timing,” Smith said, “but ten years later, the landscape has changed so much that it makes the project fraught with risk, not reward.”
When Apple launched its car program in 2014, other investors, executives, engineers, and companies were racing to chase the self-driving car idea. After Google began testing its prototypes on California roads, the entire Silicon Valley was convinced that self-driving cars would soon be commonplace. Apple didn’t want to be left behind.
At the time, Apple needed to respond to the expectations of top engineers for its next project, according to three people familiar with the matter. Apple had just launched the Apple Watch, and many engineers couldn’t wait to start working on the new product. Apple CEO Tim Cook approved the car project, in part to prevent a brain drain of engineers to Tesla.
At the same time, Apple needed to find new ways to expand its business. Apple was expecting iPhone sales to slow down in the next few years. The transportation industry is $2 trillion, and one component of that is automobiles, which could help Apple. Apple’s annual revenue at the time was nearly $200 billion.
Despite Cook’s vote of confidence in the car project, team members knew they were fighting a harsh reality, according to six employees familiar with the project. If it makes it to market, an Apple car will likely cost at least $100,000, but its margins are still slim compared to smartphones and headphones. Moreover, an Apple car won’t be available until years after Tesla dominates the market.
Had given up on buying Tesla, to begin with
According to two people familiar with the matter, Apple had some discussions with Elon Musk about buying Tesla. Musk has previously said that he tried to sell Tesla to Apple, but Cook refused to speak with him. However, Apple ultimately decided that building its own cars made more sense than acquiring and integrating another business.
Musk has not commented as of this writing.
From the beginning, the project was plagued by leadership disagreements over the direction it should take, people familiar with the matter said. Steve Zadesky, who was initially in charge of the effort, wanted to build an electric car that could compete with Tesla. But Jony Ive, then Apple’s chief design officer, wanted to develop a self-driving car, which members of Apple’s software team said was doable.
Apple, which was sitting on $155 billion in cash reserves at the time, made a big splash by hiring hundreds of people experienced in machine learning and other capabilities that would be critical to building self-driving cars. The influx of people made Apple Cars the first of the company’s programs, with so many outsiders unfamiliar with the company’s culture, to be involved in development.
As of this year, the Apple Car team has more than 2,000 employees, including engineers who have worked for NASA and engineers who developed race cars for Porsche.
The team has developed a range of new technologies, including a windshield that displays turn-by-turn navigation and a sunroof that uses a special polymer to reduce solar heat.
To boost employee morale and reinforce guidance, prominent Apple executives such as Ivey and Mac engineering chief Bob Mansfield were involved. Apple integrated several acquired startups into the car team.2021 To steer the project toward success, Apple put Kevin Lynch, the executive who successfully built the Apple Watch, in charge of car development.
Ivey and his team of designers created a concept car that resembles European minivans like Fiat’s Multipla 600, a compact van with six windows and a curved roof. The concept car designed by Ivey has no steering wheel and will be controlled via Apple’s virtual assistant Siri.
One day in the fall of 2015, Ivey and Cook met at the car project’s headquarters in Sunnyvale, California, to show how the car would work. The two men took their seats inside a mock cockpit. Outside the cockpit, a voice actor read from a written script what Siri might say while the imaginary car was in motion. According to two people familiar with the demo, the actor read out an answer when Ivey asked Siri to inquire which restaurant they were passing.
Changing direction
By 2016, it was clear that Apple’s car project was in trouble. Zadsky left Apple, and his successor, Mansfield, told the project team that they would shift their focus from building cars to developing self-driving car systems, according to three people familiar with the matter.
Apple received a permit from the state of California to begAccording to three people familiar with the matter, in testing Lexus SUVs equipped with sensors and computers. Apple wanted to build self-driving shuttles and find suppliers on its corporate campus. It consulted with automakers such as BMW, Nissan, and Mercedes-Benz, and eventually struck a deal with Volkswagen to supply its Transporter vans.
Over the next few years, two more leaders took over the auto business. Former Tesla executive Doug Field fired more than 200 employees as he worked to build Autopilot. Then Lynch, who replaced him, changed the company’s plans and went back to the original idea of building electric cars. Mansfield and Field have not commented on this as of press time.
Termination.
Apple told employees at an internal meeting on Tuesday that earlier this year, the company’s leadership decided it would be better to spend the company’s resources on researching generative artificial intelligence rather than cars. Some members of the Titan team will be reassigned to the AI department, Apple said.
Those involved in the development of Apple’s cars applauded Apple’s decision to shut down the program, saying that the technology behind generative AI could be invaluable to the future of Apple’s crucial iPhone business.
While the Apple Car project has been ended, its underlying technology has survived. According to three people with According to three people familiar with the matter, knowledge of the preturnedApple plans to take what it learned about AI and automation and apply it to other technologies it is working on, including AirPods with cameras that are powered by AI, robotic assistants, and augmented reality.
While engineers working on automation software development will begin working on AI projects, the rest of the automotive team has been told they will need to apply for other positions at the company.
