Hundreds of employees from the team will be laid off while many others will be transitioned to generative AI projects
What just happened? Demand for electric vehicles has been declining, which is likely one reason why Apple has bowed out of the market even though as recently as two weeks ago it was still test driving its EV prototypes. Apple’s departure, of course, is great news for Tesla CEO Elon Musk, who warned of a sharp slowdown in sales growth this year.
It has been an open secret for years that Apple was working to develop an electric car with autonomous capabilities. Now it seems those efforts have been shelved, according to an announcement from Chief Operating Officer Jeff Williams and Kevin Lynch, a vice president in charge of the effort. Sources have told various media outlets that the the decision to shelve the project was made to the team yesterday morning.
The decision no doubt was a surprise to them, if not a shock. Just two weeks ago, Apple was testing a car outfitted with autonomous capabilities on a California highway in Sunnyvale, according to the state’s Department of Motor Vehicles.
Apple will likely be laying off hundreds of people from the nearly 2,000 employees who worked on the project, the sources have also said. The remainder will move to the artificial intelligence division under executive John Giannandrea, where they will focus on generative AI projects, which have become a key priority for Apple.
There was no word on why Apple decided to scuttle its efforts, which had been code-named Project Titan, although news reports have suggested over the years that the project was struggling amid multiple leadership changes. And while Apple also reportedly found self-driving technology to be a challenge, its vision of the aesthetics was always clear: the vehicle would have a limousine-like interior and voice-guided navigation. All of this screams luxury and Apple has shown it has designs on this segment of the market with the recent announcement that Porsche and Aston Martin will be the first vehicles to sport the next generation of CarPlay.
But Apple never seemed able to decide on the basics: would its emphasis be on developing an all-electric vehicle that could compete with Tesla or would it be focused more on building an autonomous vehicle? Rumors eventually settled on a car with more conventional car features like a steering wheel and pedals with self-driving capabilities available for certain situations such as highways.
Ultimately, the final blow to Project Titan was likely the marked decline in demand for electric vehicles. Sales of electric models rose rapidly in the first 11 months of 2023 at a pace that was faster than the larger car market but slower than in previous years. Enthusiasts for the category were among the early adopters but there are clear signs that mainstream buyers have been put off by the high purchase price, the higher cost of repairs and insurance and the challenge of finding charging stations. As a result, many auto manufacturers are reassessing their investment plans – a group that Apple has now joined.
All of this, of course, is good news for Tesla CEO Elon Musk, who warned investors that there would be a sharp slowdown in sales this year.
