Apple has decided to halt its decade-long endeavor to develop an electric car, a source familiar with the matter revealed to Reuters on Tuesday.
The decision marks the end of a plan that aimed to propel Apple into the automotive industry, potentially mirroring the success of its iconic iPhone. However, the project faced numerous challenges and variable progress throughout its lifespan.
The cancellation comes amid a broader trend of global automakers scaling back investments in electric vehicles due to a significant drop in demand. As part of the shift, some employees from the abandoned project will transition to Apple’s artificial intelligence (AI) division, Bloomberg News reported first. Apple, when approached for comment, declined to provide any official statement.
Commenting on the move, Ben Bajarin, CEO of consulting firm Creative Strategies, remarked, “If it is true, Apple will put more focus on GenAI and that should give investors more optimism about the company’s efforts and ability to compete at a platform level on AI.”
Apple’s cautious approach to AI has raised concerns about its competitiveness compared to tech giants like Alphabet and Microsoft, which have been at the forefront of integrating AI into their products. This caution has reflected in Apple’s share performance, with gains last year being the smallest among the top-performing tech stocks.
Additionally, Apple’s position as the world’s most valuable company was recently overtaken by Microsoft, signaling challenges for the iPhone maker amidst weakening demand, particularly in key markets like China. Simultaneously, the electric vehicle industry is grappling with a slowdown in demand due to high interest rates, leading to job cuts and production reductions across the sector.
