Apple has shuttered its Project Titan car initiative after 10 years of development.
Reasons for the shutdown include unclear project prospects, massive expenditures, the risk of low margins, and declining sales in the electric car market. A portion of the 2,000 employees working on the project will be laid off, while others will be transferred to the AI division.
Project Titan was no easy feat. Launched in 2014, it marked Apple’s foray into a new industry. By 2017, the car was being tested on roads, but recurrent issues with autonomous driving technology arose. The project’s leadership changed its vision and product strategy multiple times. At different points, the company discussed scenarios involving purchasing an EV manufacturer or partnering with market players.
In 2021, the company planned to release a car without a steering wheel or pedals by 2025, but later pushed the date to 2026, and subsequently to 2028. Interestingly, the focus shifted from a fully autonomous vehicle to partial automation with some autonomous features.
Project Titan became a financial drain for Apple. The company planned to sell the car for $100,000 each, while investing hundreds of millions of dollars annually in the project — a concern for Apple’s board of directors. Doubts arose among leadership about whether the project could be as profitable as Apple’s other products. As a result, the company decided to reallocate project resources to AI, a genuinely profitable direction.
The company has abandoned projects before. For instance, in 2015, it scrapped plans to manufacture televisions. However, few endeavors lasted as long, attracted as many employees, or incurred such significant expenses.
The American EV industry struggles to compete with players from China. Tesla has been attempting to boost demand for its electric cars by lowering prices since early 2023. Consequently, the company lost $94 billion in market value in 2024. Similar tactics are being employed this year by American manufacturer Lucid Group Inc., which slashed its car prices by 10%. Major difficulties are experienced in the market by Hertz, GM, Ford, and others.
According to Bloomberg Intelligence forecasts, electric car sales in the US will increase by only 9% in 2024 after a cumulative annual growth of 65% over the past 3 years.
Meanwhile, the Chinese EV industry is expanding into new markets. The Chinese government, universities, and major market players have formed a consortium to jointly develop electric cars and establish supply chains. Chinese company BYD Co Ltd. plans to build a renewable energy car plant in Hungary and localize production in Europe. Additionally, Xiaomi, a manufacturer of Android smartphones, has announced a new electric car.