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Apple has reportedly scrapped its ambitious plan to build an electric car, a project that some analysts believed could revolutionize the automotive industry. According to Bloomberg, the tech giant has reassigned many of the staff working on the project, known as “Project Titan,” to its artificial intelligence division. Apple has not commented on the report.
The decision comes when electric vehicle (EV) sales have fallen short of expectations, forcing many carmakers to cut back on investments and lower prices. Meanwhile, artificial intelligence (AI) is emerging as a critical area of innovation and competition. Apple’s move could help it catch up with rivals like Microsoft and Google, leading the way in AI development.
Susannah Streeter, head of money and markets at UK-based investing platform Hargreaves Lansdown, said Apple was following a trend of declining interest in EVs and rising demand for AI.
“Apple needs to stay moving ahead in producing the technology that customers seek to justify its products’ high price tags, so thoroughly investigating the prospects AI brings for its future ranges,” she wrote in a note Wednesday.
A decade of speculation and experimentation
Apple never officially confirmed that it was working on an electric car, but there were many signs that it was pursuing such a goal over the past 10 years.
Apple hired several automotive executives since 2014 and obtained a permit from the California Department of Motor Vehicles to test self-driving vehicles in 2017. It also acquired Drive.ai, a self-driving car startup, in 2019 and hired a former BMW executive who had led the German carmaker’s EV efforts in 2021.
Apple also obtained several patents on car technology, such as a virtual reality system to prevent motion sickness and a method to adjust the window tint in realtime.
Some experts had suggested that Apple was more likely to collaborate with one or more carmakers to provide a car operating system, self-driving software, or other related technology rather than making the whole vehicle itself.
Tesla CEO Elon Musk claimed in 2020 that he had tried to sell his EV Company to Apple during a difficult period, but Apple CEO Tim Cook refused to meet with him.
Morgan Stanley analysts also said in 2020 that an Apple car could be “a transformative event” for the automobile and mobility industries in the coming decades, similar to how the iPhone disrupted the mobile phone sector.
Foxconn sees an opportunity in the EV market
While Apple may be giving up on its electric car dream, one of its biggest partners sees a massive opportunity in the EV market. Foxconn, the Taiwanese company that makes iPhones, is diversifying into making electric cars, with sales expected to start this year.
Foxconn CEO Young Liu told CNN recently that the EV business model “should be reinvented” and that his company could offer carmakers a more flexible and efficient platform.
Foxconn has already announced partnerships with several EV makers, such as Fisker, Byton, and Geely, and plans to launch its EV brand in 2023.