In what is undoubtedly another ominous sign for the electric vehicle industry, Apple has announced it is scrapping its plan to build an electric vehicle. The company has spent a decade, and billions of dollars pursuing an EV to compete with Tesla, and current market trends regarding the EV industry have led them to abandon any plan to enter the flailing segment.
Reportedly, Apple scrapped the venture known as “Project Titan” due to the excessive amount of money they have spent in the past decade trying to catch up to Elon Musk’s Tesla Motors. Now that Apple is seeing the struggles of convincing American car buyers to purchase an expensive EV instead of a gasoline-powered car, the company has called it quits.
Tech analyst Richard Windsor sounded the alarm last year. He said: “It makes no sense for Apple to sell a car. Apple makes 40-50 gross margins on its products and will not make that on seats and steering wheels.” Considering the amount of parts that have to be sourced from other companies rather than made exclusively by Apple, it would have been exceedingly difficult for the company to control production costs and build an affordable vehicle.
Apple sought to develop new battery technology rather than follow the Tesla model Elon Musk made readily available on the internet and planned to create advanced artificial intelligence to make the cars fully self-driving. However, the company failed to account for the possibility that consumers wouldn’t trust autonomous vehicles. The self-driving feature of the Tesla has proven to be more of a novelty than the company had expected, with most folks not willing to turn over control of the vehicle to a computer.
Not everyone involved is upset with the decision. Dan Morgan, a senior portfolio manager at Apple shareholder Synovus Trust, said: “Apple canceling this project is a sigh of relief for us. When you looked at Apple’s future initiatives, the car project was always the most far-fetched for Apple. This just isn’t in their wheelhouse.”
Just last month, Apple said it was pushing back the timetable on an EV from 2026 to 2028, but recent announcements within the industry may have hastened Project Titan’s demise. Most recently, Mercedez Benz announced it was scuttling its plan to sell only electric vehicles by 2030. It seemed an ambitious goal and one that the German luxury car maker has walked back due to low demand in the segment.
Mercedez Benz said in a statement: “Customers and market conditions will set the pace of the transformation. The company plans to be in a position to cater to different customer needs, whether it’s an all-electric drivetrain or an electrified combustion engine, until well into the 2030s.” It is a crushing blow to an industry that was advertised as a savior and a vital part of the battle against alleged climate change.
Despite pressure from the Biden Administration and climate change alarmists, consumers haven’t bought into the electric hype. The vehicles are costly to buy, maintain, and repair, and the technology is suspect at best. The industry hasn’t solved range-related issues with the batteries, and there is essentially no infrastructure in place for charging. Apple’s decision not to burn any more money pursuing the electric vehicle boondoggle is a smart move, at least until technology catches up and gains consumer confidence.
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