Apple decided to cancel the decade-long project of an electric car. Here’s why.
Apple scrapped plans to produce an electric car, several reports coming up on Wednesday showed. Workers in that division will be moved to Apple’s nascent AI sector, CNN reported.
It’s debated whether the electric vehicle (EV) market is in its start-up or growth phase. Though increasingly more companies invest in the sector, interest in EVs among the population is unexpectedly declining. According to some observers, it will take a few years more for the EV market to be competitive.
Artificial intelligence, on the other hand, proved to be a fast-moving and growing sector. Moreover, it definitely falls closer to Apple’s core business, being the largest tech company in the world. Apple seeks to close the gap between them and competitors like Microsoft and Google in the AI space.
The Cupertino company has reportedly worked on the legendary “Apple Car” since 2014. Though no official statements or designs were ever shown, Apple made some significant steps in that direction. The company hired several car industry executives and patented several technologies for self-driving cars.
Tesla’s CEO Elon Musk claimed he tried to sell the company to Apple once, but the deal was never even considered.
Why Apple renounced its EV dreams
Other than an apparent lack of interest in electric vehicles, there are several likely reasons why Apple decided to abandon the project.
The first one was laid out by Elon Musk himself: manufacturing a car is not like manufacturing a phone. "You can’t just go to a supplier like Foxconn and say: ’Build me a car.’", Musk once said in an interview.
Moreover, the EV landscape is changing fast, and not in the direction of big Silicon Valley firms like Apple.
Last year, China became the world’s largest EV producer, leaving Germany and Japan in the dust. The Chinese firm BYD became the largest seller of electric cars, with plans to open a new factory in Europe to expand its market there.
Even Tesla, once the go-to EV company, is struggling against competition from China. Elon Musk has nothing to counter China’s production capabilities and raw materials availability. Self-driving cars are still pure science fiction, and Tesla’s last competitive model was released over 4 years ago.
European carmakers are only now waking up to the sudden realization they may go out of business. Brands like Volkswagen, Mercedes, and BMW are quickly increasing efforts to build their answer to Chinese EV dominance.
In short, this is the worst possible time to enter the EV market. Too much competition, too scarce resources, and too little interest. Overall, Apple may have made the right call.
