According to media reports, sources familiar with the matter revealed that Apple once considered acquiring Tesla and even held negotiations with Tesla's CEO, Elon Musk. However, Apple ultimately believed that building its own car made more sense than buying and integrating another company. However, Apple recently announced the termination of its electric car project, which had been in development for about 10 years.
Previously, there were reports that Apple and Tesla may have engaged in merger talks. According to 9to5Mac, in December 2020, Musk confirmed that he had contacted Apple's CEO, Tim Cook, during the development of the Model 3 to discuss the possibility of Apple acquiring Tesla. Musk stated that Tim Cook refused to meet at the time.
Obviously, Tesla and Apple did not reach an agreement. According to sources familiar with the negotiations, Apple ultimately believed that building its own car made more sense than acquiring and integrating another company.
In addition, sources revealed that Apple's introduction of independently developed cars was mainly to retain employees. At the time, Apple had just completed the development of the Apple Watch, and many engineers were eager to start developing new products. Tim Cook approved the project in part to prevent engineers from jumping ship to Tesla.
Apple also needed to find new ways to expand its business. Apple anticipated a slowdown in iPhone sales in the coming years, and the automotive industry, valued at $2 trillion, could help Apple. At the time, Apple's business was close to $200 billion in scale.
However, Apple employees unanimously agreed that although Tim Cook had endorsed the car project, team members knew they were facing harsh realities. If an Apple car were to be launched, its price could be at least $100,000. Compared to smart phones and other technologies, the profit margins it could bring would be thin. Additionally, the Apple car would have to compete with Tesla, which already dominated the market.
The progress of the Apple car project was extremely difficult. During the project, Apple replaced four project leaders and underwent multiple rounds of layoffs. However, due to the complexity of developing software and algorithms for autonomous driving cars, the project was eventually canceled. It is reported that Apple has "burned" over $10 billion on this project.
The Apple car project not only changed four project leaders but also had an unstable strategic positioning. Initially, Steve Zadeski, who led the Apple car project, wanted to create an electric car that could compete with Tesla. Later, after Jony Ive, Apple's former chief designer, took over the car project, he wanted to create a self-driving car, which members of the software team said was feasible. At the time, Apple, with $155 billion in cash, spent heavily to hire hundreds of experienced personnel with capabilities in machine learning (an artificial intelligence technology), which is crucial for manufacturing self-driving cars. Ive and his design team drew up concept cars that resembled European mini vans, such as the Fiat Multipla 600, with six windows and a curved roof. It did not have a steering wheel and could be controlled using Apple's virtual assistant Siri.
The Apple Car team also developed many new technologies, including windshields that can reflect turning directions and roofs made of special polymers to reduce heat from the sun.
In the following years, the Apple Car project changed two project leaders. Doug Field, a former Tesla executive, focused on developing autonomous driving systems and laid off more than 200 employees from the project. Subsequently, his successor, Kevin Lynch, changed the project's plan and returned to the original idea of manufacturing electric cars.
Abandoning the car manufacturing, Apple decides to bet on artificial intelligence
Apple stated at an internal meeting on February 27th that earlier this year, Apple's management decided it was best to use the company's time to study generative artificial intelligence rather than cars. In interviews with the media, personnel who had participated in the Apple car project expressed appreciation for the company's decision to shut down the project, stating that the technology behind generative artificial intelligence could be invaluable for the future of Apple's iPhone business. Three sources revealed that Apple plans to apply its experience in artificial intelligence and autonomous driving to other technologies under research, including camera-equipped AirPods driven by artificial intelligence, robot assistants, and augmented reality.
Apple stated that some members of the car team will be transferred to the field of artificial intelligence. Some team members were told that they need to apply for other positions within the company.
