Apple is cancelling a decade-long effort to build an electric car, according to sources, abandoning one of the most ambitious projects in the history of the company.
The company made the disclosure internally on Tuesday, surprising the nearly 2,000 employees working on the project, the sources said.
They said the decision was shared by chief operating officer Jeff Williams and Kevin Lynch, a vice president in charge of the project.
The two executives told staff members that the project will begin winding down and that many employees on the car team – known as the Special Projects Group, or SPG – will be shifted to the artificial intelligence division under executive John Giannandrea.
They will focus on generative-AI projects, an increasingly key priority for the company.
The Apple car team also has several hundred hardware engineers and vehicle designers. It is possible they will be able to apply for jobs on other Apple teams.
There will be layoffs, but it is unclear how many.
The move came as a relief to investors, who sent Apple shares climbing on Tuesday after Bloomberg reported the news.
The stock was up about 1 per cent at $182.63 by the close in New York.
The decision to ultimately wind down the project is a bombshell for the company, ending a multibillion-dollar effort called Project Titan that would have led Apple into a whole new industry.
The tech company started working on a car in about 2014, setting its sights on a fully autonomous electric vehicle with a limousine-like interior and voice-guided navigation.
But the project struggled almost from the start, with Apple changing the team’s leadership and strategy several times.
Beyond the look of the vehicle, cracking self-driving technology was a major challenge. Apple had road-tested its system since 2017 using a Lexus SUV exterior, putting dozens of vehicles on roads in the US.
The company also tested more secretive parts on a gigantic track in Phoenix that was once owned by Chrysler.
In the end, Apple was facing a cooling market for EVs. Sales growth lost steam in recent months after high prices and a lack of charging stations discouraged mainstream buyers from shifting to all-electric vehicles.
Even Tesla, the pioneer of the EV revolution in the US, has warned its rate of expansion will be “notably lower” this year.
Apple once envisioned creating a car without a steering wheel and pedals, but it scrapped that notion earlier. The company also spent time working on a remote command centre that could take over for a driver.
Most recently, Apple had imagined the car being priced at about $100,000.
But executives were concerned about the vehicle being unable to provide the profit margins that Apple typically enjoys on its products.
The company’s board was also concerned about continuing to spend hundreds of millions of dollars a year on a project that may never see the light of day.
It has scrapped projects before, including a plan to make a TV set that was abandoned in about 2015.
But few endeavours have lasted this long, involved so many employees or racked up billions of dollars in expenses.
