Apple Spent More Than $10 Billion on Apple Car Before Canceling Project

[victorvictoria]

$10 Billion is a lot to throw away on a project that was considered by many to be doomed from the start.

Maybe all of that talent could been put to better use if Tim and company would have stayed in their lanes and innovated on something related to their expertise.

The most telling words from the NYT article: “The car project’s demise was a testament to the way Apple has struggled to develop new products in the years since Steve Jobs’s death in 2011.”

So, as a shareholder I think do have something to complain about. Tim Cook is a weak leader regardless of the financial engineering and overall market exuberance that has has caused all of the FANG stocks to grow during his tenure.

Oh well, maybe the Vision Pro will be that product. 😂

Just what DO you want as a shareholder, then??? You're complaining as a consumer, not as a shareholder. You buy stocks for ONE thing: TO MAKE MONEY. Not to make a statement, not for nostalgia, not for mission statements, only for one thing: TO MAKE MONEY.

I will elucidate my earlier comment: As a SHAREHOLDER, you have not complaint. A CEO's only job is to make money for the shareholders. Nothing else matters to a shareholder. Tim Cook takes second place only to Satya Nadella, but he's busy running Microsoft. Good luck finding someone who will make you more money. If you do, please share.

 

[DocMultimedia]

I really wonder how many people on this forum have worked in R&D. Has everyone here been 100% successful in everything they've tried to do?

I had to do several experiments using federal funding before I was successful in my physics research. Was it a waste of money and years? Most here seem to want to say yes when things fail.

What I did during eight years of research helped to develop a way to treat tumors with radioactive beams, and it was actually used to treat a tumor that I had twenty years later. R&D is vital. More needs to be spent. You simply never know where it might lead.

I don't think Apple should have gone in that direction, but they've developed a lot of technologies and learned a lot from the failure (hopefully).

Spend on R&D as often as you can.

 

[segfaultdotorg]

...but to burn through $10B and have nothing but carplay to show for it...

You think you hate CarPlay now, just wait until you hear about the $100/month CarPlay Pro subscription!

 

[bill-p]

Was it a waste of money and years? Most here seem to want to say yes when things fail.

It is a fact that it is a waste if you had stopped and just not continued to work on the project until it was successful and viable.

You did, so it's no longer a waste.

Apple didn't, so it is entirely a waste for them.

 

[Surf Monkey]

All of these technologies are developed in tandem. They sometimes converge in a product, sometime they dont. It doesnt mean they wasted 10 billions dollars down the drain, most of what is in AVP is very similar to a autonomous car. Where do you think all those lidars, cameras and sensors in AVP come from?

Dont believe me, watch an expert in the field (9 min in):

Said the same thing since they first showed Vision. They very obviously poached the tech from the car.

 

[Surf Monkey]

Wow, this was an article with an agenda…. “Flounder”? Members of the team knew? Couldn’t find the right leader?

No company has been able to develop autonomous driving. I remember in 2014 there was near consensus among the pundit class that all cars would be autonomous by 2020, there’s plenty of threads here mocking any naysayers, and we still live in a world where none are. Was it wrong for a massive tech hardware company to make an R&D bet on one of the major trends of the time? I don’t think so. Just like it wasn’t wrong to keep an OS X build going for Intel processors or to research folding phones.

The problem wasn’t an inability to find the right leader. No leader would have solved autonomous driving.

One mistake was not rooting out the employees who expected to fail and firing them. If you’re going to work each day on a project you’re calling a Titanic Disaster, then you’re just punching a clock and taking a paycheck— you’re not contributing. If you were competent, you’d have jumped ship for a job you expect to be successful at.

Apple pulls in close to $400B a year, had $155B in cash at the start, and people are sweating a moonshot that cost $10B over a decade…

You didn’t comprehend what the reporting said. It isn’t that they failed because they focused on autonomous drive. They failed because they kept resetting the project. First it was going to be just an EV. Then it was going to be autonomous. Then it was going to be only EV again. Then it was going to be an autonomous van for corporate clients. Etc. etc.

When there are billions of dollars being tossed at what could be a critical product for a huge company the kind of waffling and rudderless “development” the article describes appears to indicate a severe lack of leadership at the company.

 

[Lift Bar]

Other than paychecks, I'd like to see what $10b and a decade of work amounted to.

A decade of work likely led to the realization that the autonomous vehicle challenge is primarily an infrastructure issue. We've suspected this for a while, but it's somewhat reassuring to see that even the world's leading company, with a $10 billion investment, couldn't crack the problem. At least they gave it a shot. Ten years ago, it might not have seemed impossible without significant changes to infrastructure. However, as time progresses, it's becoming increasingly apparent that we're far from developing and implementing the necessary infrastructure and regulations to support true autonomous vehicles.

 

[bill-p]

A decade of work likely led to the realization that the autonomous vehicle challenge is primarily an infrastructure issue. We've suspected this for a while, but it's somewhat reassuring to see that even the world's leading company, with a $10 billion investment, couldn't crack the problem. At least they gave it a shot. Ten years ago, it might not have seemed impossible without significant changes to infrastructure. However, as time progresses, it's becoming increasingly apparent that we're far from developing and implementing the necessary infrastructure and regulations to support true autonomous vehicles.

The problem here is not "the autonomous vehicle challenge". If you have followed the whole saga, Apple downgraded their expectation from "fully autonomous" down to basically just "driver assistance" during recent time.

So basically just a fancy car that can "suggest" how you can do certain things but it wasn't going to drive itself even if they were to continue and somehow get it to release at some point.

And even the downgraded expectation to basically just release a regular car didn't work out. Apple realized they weren't going to be able to give us anything the other 10 car manufacturers already didn't give... at all price points possible. So they simply just gave up.

 

[Lift Bar]

The problem here is not "the autonomous vehicle challenge". If you have followed the whole saga, Apple downgraded their expectation from "fully autonomous" down to basically just "driver assistance" during recent time.

So basically just a fancy car that can "suggest" how you can do certain things but it wasn't going to drive itself even if they were to continue and somehow get it to release at some point.

And even the downgraded expectation to basically just release a regular car didn't work out. Apple realized they weren't going to be able to give us anything the other 10 car manufacturers already didn't give... at all price points possible. So they simply just gave up.

You're right that the focus shifted from full autonomy to more of a driver assistance level. The original allure was the potential for Apple to bring its innovative touch to autonomous hardware and software. That was where their true value add lay. Once it became clear that achieving this was out of reach, and they couldn't offer anything significantly different from what other manufacturers already provide, it makes sense that they decided to shut it down.

 

[svish]

Interesting to hear all the details happening behind the scenes. Seems like it was good to cancel the project before spending a lot more.

 

[bill-p]

You're right that the focus shifted from full autonomy to more of a driver assistance level. The original allure was the potential for Apple to bring its innovative touch to autonomous hardware and software. That was where their true value add lay. Once it became clear that achieving this was out of reach, and they couldn't offer anything significantly different from what other manufacturers already provide, it makes sense that they decided to shut it down.

Apple has never been known for being "innovative" with AI or any "intelligence" per se, even if we want to put Siri on a pedestal to say that it "started the whole race to smarter assistants", Siri as it is is still not really a good example of Apple being "innovative".

I do have some... idea of what Apple was trying to achieve with the project, because I do know someone on the team, so let's just say their goal was indeed as you said: "something more than what other manufacturers can offer". But ultimately, it's not the unattainable nature of that goal that made Apple give up since they downgraded the expectation a while back.

I think it's clear they simply just want to shift focus over to AI (I don't think anyone needs insider knowledge to realize that), so now they're just following the same trend that other companies followed. Plus the car project would have basically converted them to "just another car manufacturer" if they had continued, so maybe that was one of the things under consideration, too. Apple just did not want to become "just another car manufacturer".

Though that really does beg the question: if they didn't want to become "just another car manufacturer", why did they even start the project in the first place?

 

[groove-agent]

Canceling the Apple Car project probably saved thousands, maybe millions of lives. Having a vehicle armed with Siri AI technology would result in a weapon of mass destruction.

 

[phenste]

I’ve refrained from commenting on any of these posts bc I know everyone has something to say, but this still feels quite shocking even if the project stagnated like almost nothing I’ve seen before in my Apple-nerd days. $10B is an inconceivable amount of money—a massive expense even for the most valuable company on the planet. I wonder if they got stuck in the sunk cost fallacy with this one.

I do dream of truly autonomous driving for personal reasons—alas, I don’t think it’s realistic, barring some unforeseen technological breakthrough. (such breakthroughs are kinda the nature of R&D, but…yknow)

 

[yabeweb]

"People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully."

- Steve Jobs

And then they pick the AVP…..

 

[Lift Bar]

Apple has never been known for being "innovative" with AI or any "intelligence" per se, even if we want to put Siri on a pedestal to say that it "started the whole race to smarter assistants", Siri as it is is still not really a good example of Apple being "innovative".

I do have some... idea of what Apple was trying to achieve with the project, because I do know someone on the team, so let's just say their goal was indeed as you said: "something more than what other manufacturers can offer". But ultimately, it's not the unattainable nature of that goal that made Apple give up since they downgraded the expectation a while back.

I think it's clear they simply just want to shift focus over to AI (I don't think anyone needs insider knowledge to realize that), so now they're just following the same trend that other companies followed. Plus the car project would have basically converted them to "just another car manufacturer" if they had continued, so maybe that was one of the things under consideration, too. Apple just did not want to become "just another car manufacturer".

Though that really does beg the question: if they didn't want to become "just another car manufacturer", why did they even start the project in the first place?

Apple’s innovation lies in their ability to integrate high tech into mainstream markets effectively. They didn't invent multitouch, but they bought Fingerworks and used that technology to create a game-changing device. That's the kind of innovation I'm referring to here.

When Apple started the car project, autonomous driving seemed within reach. But as the project progressed, the reality of the challenges, including the need for a massive overhaul of infrastructure and new laws, became apparent. You need a viable environment for these cars to operate in.

I agree with you that Apple didn't want to become "just another car manufacturer." They started the project with the ambition of redefining the automotive industry, much like they did with smartphones. But the obstacles proved too great, and it's understandable why they decided to pivot away from it.

 

[swingerofbirch]

With $10 billion they could have bought me a mansion and still had money left over to not build a car.

What were they thinking?

 

[jooish]

Well first of all, every penny of that is a deductible expense for a company that makes $1 billion a day in revenue. Then there are the hundreds of patents that Apple has published on car-related technologies. They'll easily make that money back. But in the meantime, again, it's equivalent to less than two weeks of revenue. Loose change in the sofa cushions.

There's a HUGE difference between revenue and profits. $10B is ~10.3% of Apple's $97B profits from last year, if my sources were correct.

Whether or not the tech they patented is good for the consumer is debatable, too... It could be, but not always.

 

[JWD]

I would never by a Hyundai, even an Apple branded Hyundai is unthinkable

 

[filmgirl]

And yet the Times continues to circle the drain financially whilst Apple currently has a market valuation of 2.80 trillion. Hmm.

The Times is one of the most profitable media companies on the planet, with over a billion in revenue for just digital subscriptions and more than a quarter of a billion in operating profit for 2023. It has $770 million in cash on hand. No, it isn’t Apple (but the only company that compares to Apple right now is Microsoft, with their $3.03T market cap) but compared to every other print media company in the industry, it isn’t even close. Bloomberg as a company makes more money and profit but Bloomberg News is a feeder for the terminal; it isn’t a profit center.

In fact, I would argue that the best corporate comeback story of the last 50 years, other than Apple, is The New York Times, who in a decade has pulled off an absolutely Apple-like resurgence.

If you want to disagree with the reporting out of some stupid sense of loyalty to a company that you don’t work for or have any leadership role in, fine. But at least get your facts correct before you say something is circling the drain.

But even if the Times was circling the drain (and it isn’t, it’s just the opposite), that would have zero bearing on the veracity of the reporting of what every single account by every single outlet has deemed a disaster of a project. And a project failing doesn’t mean it wasn’t worth trying; every company willing to make big swings at the future is going to miss the mark sometimes.

To me, the money spent on the project is immaterial. A billion dollars a year amortized and with the now expired R&D tax credits and during an era of 0% interest means this cost a company with Apple’s revenue figures essentially nothing.

The concern, and probably the reason the project was canceled, is that resourcing isn’t finite and there are probably better ways to use engineer and designers time than on a moonshot that had a constantly changing scope, regulatory and technical challenges, small margins, and intense competition, all for something that might take another 5 years of work to launch an actual car.

 

[Donoban]

Though that really does beg the question: if they didn't want to become "just another car manufacturer", why did they even start the project in the first place?

What was true back then isn't true today. Kudos to Apple for making a new decision and ignore the sunk costs.

I'm sure they developed a truck load of new tech.

 

[Donoban]

14" MBP M3 Max 128GB/2TB, 16" MBP M1 Max, 27" 5K iMac i9/5700XT Pro 128GB/2TB (2020), iPhone 15 Pro Max 512GB, iPad Pro 11 256GB 5G (2022), iPad mini (2021), Apple Watch Series 8 40mm LTE (Stainless Steel), AirPods Pro 2G, AirPods Max, Apple TV 4K (2022), HomePod 1G

Look at you!

 

[zombitronic]

Apple will take what it learned from the car project and apply it to other devices like AI-powered AirPods with cameras, robot assistants, and augmented reality.

finally, iRobot

 

[MrENGLISH]

I have nothing to back this up with but I feel like Tim may have been talked into this by Jony Ive. This feels like a Jony Ive project wanting to show he was just as capable as Steve to guide the future of Apple. The problem with making a car is its a lot more than just design. I don’t miss Jony nearly as much as I thought I would when he left.

Eddie Cue seems more like the car guy of the executive team. I feel like he’d be the one convincing Tim they needed to make a car.

 

[sjsharksfan12]

I was wondering what the number was. More money down the drain. That feels like what the American Dream really is.

 

[turbineseaplane]

Apple’s innovation lies in their ability to integrate high tech into mainstream markets effectively. They didn't invent multitouch, but they bought Fingerworks and used that technology to create a game-changing device. That's the kind of innovation I'm referring to here.

That was nearly two decades ago and under vastly different leadership

Really it was frankly a different company entirely …. In tone and tenor, and certainly in sheer scale and business objective direction.