@Apple is getting two major advantages out of giving up on its #EV car project.
1. It allows Apple to divert billions of dollars into projects that are easier to realize and promise to have greater margins, too. Those are mainly #artificialintelligence products, but also wearables and mixed reality devices.
It is unclear how much money Apple spend over the decade that its “#ProjectTitan” was active. But at an estimated 2,000 employees working on the project, salaries alone would amount to $10 billion over the last ten years, so perhaps total spending was somewhere around $20 billion.
2. Apple exits a high-risk investment. It is incredibly hard for a newcomer to break into automotive, as @Tesla’s growing pains have proven. And even if you succeed, you face a knives-out competition. There are more than 200 #electricvehicle manufacturers in China, all of which are chomping on the bit to enter Western markets. Even Tesla wil have a hard time dealing with that kind of competition.
What’s more, the car business has low margins, which makes big investments risky bets. And finally, EVs seem to have entered their trough of disillusionment, with consumers dragging their feet on adopting EVs and automakers pulling back investments.
Apple decided to stop throwing good money after bad – good for them!
I don’t expect major layoffs following this course correction. Most engineers who worked on the car project can transition their skills to other AI-related initiatives within Apple.
Apple’s automotive exit has little impact on the industry’s competition. Apple was far away from rolling out a car, so its threat to Tesla and others was more of a theoretical nature. The market felt the same way: Tesla’s stock was up by not quite 2% at 2pm ET, which is well within the normal volatility of the stock. But it’s certainly nice for Elon to have one fewer, if minor, worry.
On the other hand, the market was not exactly celebrating Apple’s exit from the car industry. Its stock was down 1%, likewise part of normal volatility.
W Media Research 