Tech giant Apple has reportedly ended its decade-long pursuit to enter the electric vehicle market after spending billions of dollars on the effort known as Project Titan.
The Wall Street Journal reported that part of the reason Apple pulled the plug was that the company was lighting cash on fire trying to catch up to Elon Musk’s Tesla Motors.
“It makes no sense whatsoever for Apple to sell a car,” technology analyst Richard Windsor said last year. “Apple makes 40-50pc gross margins on the products it sells, and it will not make that on seats and steering wheels.”
Apple wanted to develop new battery technology that would dramatically cut the cost of electric vehicles and wanted to develop software that would make their cars fully self driving.
Some of the 2,000 employees Apple had working on the project will be transferred to other areas in the company while the rest will be laid off, the report said.
“Apple canceling this project is a sigh of relief for us,” said Dan Morgan, a senior portfolio manager at Apple shareholder Synovus Trust. “When you looked at Apple’s future initiatives, the car project was always the most far-fetched for Apple. This just isn’t in their wheelhouse.”
The news comes after Apple said last month that it was pushing back its timetable for debuting its electric car from 2026 to 2028, which comes as the electric vehicle market has fallen off significantly in recent years due to a wide range of consumer concerns.
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Mercedes-Benz announced last week that it was scrapping its plans to only sell electric vehicles after 2030 due to low consumer demand. The Verge said that the report showed a stunning turnaround for the German automaker from its pledge three years ago to completely phase out selling gas-powered vehicles by 2030 and to only sell EVs.
“Customers and market conditions will set the pace of the transformation,” Mercedes said in its fourth quarter earnings statement. “The company plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s.”
The New York Times reported earlier this month that the Biden administration was preparing to ease its push to force EVs onto American consumers as consumer demand for the vehicles remains low, dealerships have expressed serious concerns, and automakers have had to cut production and revamp production of gas vehicles.
The report said the move was a “concession to automakers and labor unions” from the administration, as it was forcing “limits on tailpipe emissions” to force Americans to switch from gas-powered cars to more expensive electric vehicles — which often have performance issues in adverse weather conditions. The serious lack of charging stations, and the time it takes to recharge electric vehicles, are among other top complaints from consumers.