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Updated Feb 28, 2024, 12:25pm EST
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Apple abandons electric car efforts, will prioritize AI: report

Insights from Fortune, Semiconductor Engineering, and CNN

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Apple is reportedly gutting its electric vehicle program and will shift many of the employees working on the decade-old project to its artificial intelligence division, Bloomberg reported Tuesday.

The move, if confirmed, would mark the end of a much-anticipated, multibillion-dollar effort by the tech giant to enter an entirely new industry. Layoffs are expected but the number is not yet known, sources told Bloomberg.

Launched in 2014, Apple envisioned building a fully autonomous electric vehicle that would eventually compete with Tesla in the luxury space. But the team went through multiple leadership changes over the years, and executives feared a mooted price-tag of around $100,000 would bring in scant profit margins, even as investors poured millions into development each year.

Apple declined to comment on the Bloomberg report.

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Apple EV would struggle to compete in highly-saturated market

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Sources:  
Fortune, Bloomberg, Barron's

Years away from release, the Apple EV would have come to market when the sector had “lost its shine,” opined a writer in Fortune. While initially envisioned as a fully autonomous vehicle capable of driving on any terrain, the company eventually shifted to using self-driving and braking technology more closely resembling Tesla’s capabilities, Bloomberg reported. Although Tesla was widely seen as Apple’s biggest competitor in its car-making efforts, the former’s stocks “barely budged” after the tech giant’s news, suggesting that “while an Apple car might have been disruptive, it was always a low-probability event,” Allen Root wrote for Barron’s.

Developing an EV battery is tough

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Sources:  
CNN, Semiconductor Engineering

“Making the powertrain of electric vehicles – the batteries, electric motors and power management systems – requires more total labor, not less, than that involved in making engines and transmissions,” a labor researcher at Carnegie Mellon University told CNN. In particular, designing a lightweight car with complex cooling systems for a battery pack — the heaviest component of the EV — requires using aluminum and composites that are “more difficult” to work with than the steel traditionally used in cars. Meanwhile, adding features such as autonomous driving with a lot of cameras and image processing, drains a lot of electric power, reported Semiconductor Engineering.

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