Apple is cancelling a decade-long effort to build an electric car, according to sources, abandoning one of the most ambitious projects in the history of the company.
The company made the disclosure internally on Tuesday, surprising the nearly 2,000 employees working on the project, the sources said.
They said the decision was shared by chief operating officer Jeff Williams and Kevin Lynch, a vice president in charge of the project.
The two executives told staff members that the project will begin winding down and that many employees on the car team – known as the Special Projects Group, or SPG – will be shifted to the artificial intelligence division under executive John Giannandrea.
They will focus on generative-AI projects, an increasingly key priority for the company.
The Apple car team also has several hundred hardware engineers and vehicle designers. It is possible they will be able to apply for jobs on other Apple teams.
There will be layoffs, but it is unclear how many.
The move came as a relief to investors, who sent Apple shares climbing on Tuesday after Bloomberg reported the news.
The stock was up about 1 per cent at $182.63 by the close in New York.
The decision to ultimately wind down the project is a bombshell for the company, ending a multibillion-dollar effort called Project Titan that would have led Apple into a whole new industry.
The tech company started working on a car in about 2014, setting its sights on a fully autonomous electric vehicle with a limousine-like interior and voice-guided navigation.
But the project struggled almost from the start, with Apple changing the team’s leadership and strategy several times.
Beyond the look of the vehicle, cracking self-driving technology was a major challenge. Apple had road-tested its system since 2017 using a Lexus SUV exterior, putting dozens of vehicles on roads in the US.
The company also tested more secretive parts on a gigantic track in Phoenix that was once owned by Chrysler.
In the end, Apple was facing a cooling market for EVs. Sales growth lost steam in recent months after high prices and a lack of charging stations discouraged mainstream buyers from shifting to all-electric vehicles.
Even Tesla, the pioneer of the EV revolution in the US, has warned its rate of expansion will be “notably lower” this year.
Apple once envisioned creating a car without a steering wheel and pedals, but it scrapped that notion earlier. The company also spent time working on a remote command centre that could take over for a driver.
Most recently, Apple had imagined the car being priced at about $100,000.
But executives were concerned about the vehicle being unable to provide the profit margins that Apple typically enjoys on its products.
The company’s board was also concerned about continuing to spend hundreds of millions of dollars a year on a project that may never see the light of day.
It has scrapped projects before, including a plan to make a TV set that was abandoned in about 2015.
But few endeavours have lasted this long, involved so many employees or racked up billions of dollars in expenses.
Video: This UAE start-up converts your car into an EV for a greener tomorrow
Mohammed bin Zayed Majlis
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Top New Zealand cop on policing the virtual world
New Zealand police began closer scrutiny of social media and online communities after the attacks on two mosques in March, the country's top officer said.
The killing of 51 people in Christchurch and wounding of more than 40 others shocked the world. Brenton Tarrant, a suspected white supremacist, was accused of the killings. His trial is ongoing and he denies the charges.
Mike Bush, commissioner of New Zealand Police, said officers looked closely at how they monitored social media in the wake of the tragedy to see if lessons could be learned.
“We decided that it was fit for purpose but we need to deepen it in terms of community relationships, extending them not only with the traditional community but the virtual one as well," he told The National.
"We want to get ahead of attacks like we suffered in New Zealand so we have to challenge ourselves to be better."
More coverage from the Future Forum
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If you go
The flights
Emirates (www.emirates.com) and Etihad (www.etihad.com) both fly direct to Bengaluru, with return fares from Dh 1240. From Bengaluru airport, Coorg is a five-hour drive by car.
The hotels
The Tamara (www.thetamara.com) is located inside a working coffee plantation and offers individual villas with sprawling views of the hills (tariff from Dh1,300, including taxes and breakfast).
When to go
Coorg is an all-year destination, with the peak season for travel extending from the cooler months between October and March.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
More from UAE Human Development Report:
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
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