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

[laptech]

From it's founding in 2003 to it's first battery production car in 2008 (the Roadster), by 2009, Tesla had raised $187 million and built 47 battery powered cars. From wikipedia: https://en.wikipedia.org/wiki/Tesla,_Inc.

Tesla began production of the Roadster in 2008 inside the service bays of a former Chevrolet dealership in Menlo Park. By January 2009, Tesla had raised $187 million and delivered 147 cars.

So, from it's founding to the first production run of battery powered cars, it took Telsa 7 years and $187 million to do so. According to the MR article Apple has spent 10 years and more than $10 billion to build it's own battery powered car and they have nothing to show for it. Even if you was to take in inflation over the years (https://www.saving.org/inflation/), it would still not even come close to a billion $$$ for what Tesla spent on developing it's first car.

Therefore if Tesla was able to design and build (R&D and production costs) it's first battery powered car for the sum of
$187 million, how on earth has Apple failed to even to get a prototype built and shown to the public having spent more than $10 billion.

That is a huge failure by Tim Cook to have signed off on the project.

 

[Pezimak]

I want a CEO that doesn’t chase folly in an industry that he knows nothing about. I want a CEO that doesn’t lose $16 Billion Dollars throwing good money after bad.

I wouldn’t normally reply to a Troll post like yours. But your tone is so condescending, it makes my blood boil. I post a sarcastic, throwaway comment about a CEO that oversees a failed program and you have to chime in with a Red Herring for what? To make yourself look like a genius on internet message board? Congratulations on provoking a reaction. I lose. It’s always better to provoke a reaction than it is to react to provocation. And, you succeeded. I hope it makes your day.

I didn’t say that the stock didn’t rise while Tim Cook happened to be CEO. It did. And so did many other tech stocks. That wasn’t my point, notwithstanding your Red Herring.

You ignored the issue. I said that Tim Cook approved and pushed a program that many say was doomed from the start. A program that cost 16 Billion Dollars. A program that diverted company resources from other projects that could have actually made money. And, I said that, as a shareholder, I’m unhappy that this happened. This is a program that (I feel and felt at the time I read about it years ago) Apple never should have been involved in.

Whether the stock went up or down is irrelevant to my point. Now leave me alone and go find somewhere else to play.

It is much much much more difficult to change a company the size of Apple into a totally different one. Your point is very valid in that sense. Unfortunately Apple has obsessed over increasing its profit margins and its market cap massively whilst trying to achieve this transition. The two don't really work well together. The work involved is immense.
A car may have tech in it, but its design regulation and laws surrounding it are VASTLY different to a phone or computer. You may have new bright ideas but they have to fit in this new framework to be viable.

It was a bold move by Apple, but they couldn't get a deal with any other manufacture, couldn't hire the staff, and ultimately didn't have the right direction for the project and dare I say leadership for it, because they are used to making computers and phones, not cars and especially not brand new yet to be brought to market by anyone self driving cars!

I hope they got something out of it, I imagine they have.

To have that 10 billion they will have had to of made 30 billion, that's how it works right? That's an awful lot of sales over the last few years for one project.

 

[Beautyspin]

I don’t think this is necessarily a bad thing. Given the types of patents that have been a result of the initiative it seems like Project Titan at some point started functioning as a Basic R&D lab. Think Bell Labs or Palo Alto Research center.

Apple has been patenting some really cool stuff across a whole range of areas that while were dreamt up in the context of a car, can definitely apply to a whole host of different areas.

https://www.patentlyapple.com/autonomous-vehicle-technology/

Smart fabrics being just one area that comes to mind…

So, what will it do with the patents? Since it will not develop a product nor will it ever develop a product, will it become a patent troll?

 

[Beautyspin]

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.

If Apple is not developing a car, then what are the patents for? Will Apple use them as a patent troll and make money?
Irrespective of how you spin it, it is clear that even Xiaomi was able to develop a car with its meager resources, but Apple with its billions could not do it? What does it say about Apple? That it can only develop once someone shows the way like they are waiting on foldables rather than be pioneers as they had been with iPod and iPhone. Looks like those days are gone and Apple seems to have realized it better than all the others. However you spin it, it is an epic fail.

 

[Luis Ortega]

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

With most grant proposals, 90% is typical for the amount devoted to pay checks.

 

[oldwatery]

I'm sorry, but this seems to be only a you issue. I love how flawless iMessage works across my devices, including the older ones. There's also something wrong with your Apple Watch since my AW5 doesn't do that. Then again, that sounds like user error. Walking is very light on the heart, meaning it takes quite a bit for a device to recognize you're "working out". Suggestion: start a workout. Also, try actually working out: running, lifting weights, biking, swimming, etc.

No it seems to be an Apple Fan issue with people like you putting down anyone that had any problems with Apple products. Message is a mess across devices and Siri is beyond a joke. Mail is prehistoric too. Spell check is annother joke. Apple no longer innovates. They no longer care about core values and issues that don’t get fixed. They just want to add more stupid and basically useless features every year..on the day to fool people into believing the products are improving . As for your childish and bullying sarcasm….well that says everything we need to know about you and your objectivity.

 

[Luis Ortega]

If Apple is not developing a car, then what are the patents for? Will Apple use them as a patent troll and make money?
Irrespective of how you spin it, it is clear that even Xiaomi was able to develop a car with its meager resources, but Apple with its billions could not do it? What does it say about Apple? That it can only develop once someone shows the way like they are waiting on foldables rather than be pioneers as they had been with iPod and iPhone. Looks like those days are gone and Apple seems to have realized it better than all the others. However you spin it, it is an epic fail.

I suspect that it’s more about making profit. Car making isn’t as profitable as selling gadgets and services.

 

[AirpodsNow]

Business wise is a difficult choice to make, sink more money to save the ten billion or write (partly?) it off and use these resources for something else with higher probability of success.

I would like to believe it also has to do with the EV market potential outlook in the coming years which is more clearer than a few years ago, and all the projections have been reduced. Also the cost structure is more known and therefore the profit margins. I wonder where Apple could have seen them making good profit margins in this industry. It doesn’t look like it’s interesting enough anymore.

 

[Chet-NYC]

All of these articles provide no context.

Not just is a billion a year a tiny fraction of revenue for Apple, they assume that Tim Cook took a billion in cash, went to the center of Apple Park and set it on fire.

No, that is not what happened of course. A shitton of research in autonomous driving happened. I think it's safe to say that any company that has Apple's resources and put this much money into a project that was always more AI than an actual car, is walking away with a huge amount of progress in the same field that has seen companies like Nvidia explode in value.

I think walking away from the car was absolutely the right thing to do. What was learned from the project will be seen in other Apple products for decades to come. Ideally, I would love to see Apple take what they learned and create a processor that can truly compete with the Nvidia H100- the one that sparked their AI growth.

 

[t0rqx]

Think how much more sensibly priced their actually shipping devices could have been if they hadn’t wasted all that on the doomed-from-the-beginning car project.

Not forgetting producing products without scratches making production efficient and perfect.

 

[t0rqx]

I’ll give Apple this, they aren’t afraid to try and fail. Remember the sapphire debacle?
Hopefully they learned a lot to make future products better.

Looking at the Apple Vision Pro. How current products are produced with scratches. Nah.

 

[amartinez1660]

The way Rvian and Lucid are losing Millions/Billions in a quarter, Apple was smart to pull the plug. Rivian is losing few tens of thousands of dollars on every sale. EV market is Tesla, pretty much all others are pulling back and losing money.

This is true (and it attracts downvotes as you will see with my own message).

EV manufacturing is a tricky thing, maybe the people at Apple didn’t know what they were getting into or were hoping to be able to play the game without having to resort to the usual things car manufacturers fall into: all sorts of subsidies, sales at a loss, incentives, etc

——
Many will say that it isn’t like so, but was checking these articles recently on Ford, quite the regression:

Ford downsizes EV battery factory plan | TechCrunch

Ford will downsize its plans to build a factory in Michigan that makes cheaper lithium iron phosphate batteries using tech from China’s CATL.

techcrunch.com

(Postponing the investment of $12B is right at the ballpark of this Apple car ordeal)

Ford hits the brakes on $12 billion in EV spending because EVs are too expensive

Customers don’t want to spend extra on Ford’s EVs.

www.theverge.com

Ford halves 2024 electric F-150 production plans on slowing demand

Ford is cutting 2024 production goals in half for its F-150 Lightning EV pickup truck on slowing demand for battery-powered models. Read on.

financialpost.com

The Mustang MachE is also getting price slashing:

Ford slashes Mustang Mach-E prices again as EV price war enters its second year

For model year 2023, the Mustang Mach-E is getting a big price cut, as much as $8,000 off for some versions.

www.theverge.com

It definitely isn’t a “no brainer” getting into EV cars, and I bet there’s lots of red tape, weird regulations and taxations ON TOP of the already existing competition with Tesla and many Asian manufacturers.

 

[hugogogo2003]

One word: battery.

China has a chokehold on everything that has to do with the battery that EVs run on. Most carmakers realize they just can't beat the Chinese when it comes to costs.

This is also one major reason Toyota and Honda have resisted pure EVs for so long and opted for hybrids instead.

The straw that broke the camel's back in this case might be the de-risking from China that's all the rage at the moment. Without Chinese expertise in battery manufacturing, there is no way Apple will make a fully autonomous EV with the kind of profit margin they deem acceptable.

All this reporting on internal disagreement at Apple might just be a smokescreen.

I'd say autopilot instead. 10 years ago it felt like the very-fast progress made in autonomous capabilities meant that full autopilot was only a few years away. Musk said in 2016 that within 2 years, you could auto-summon your Tesla in LA while the car is located in NYC lol. And it's slowly but surely been obvious that full selfdriving was WAY more difficult than expected, and as each year passes it seems like the wait will get longer. 8 years ago we were seemingly 2 years away from it. Nowadays it's a decade at least.
Autonomous was more important than battery, because your car was meant to go charge itself on its own whenever it's not being used, which would have given a lot of flexibility in battery technology.
A car that's not fully self-driving/autonomous didn't make sense for an electronic company like Apple.

 

[threesixty360]

The Times article does not paint a pretty picture of Apple’s ability to innovate in the post Jobs era.

Innovation in itself does not make a company successful. Execution is always the biggest problem. Cook is way more successful than Jobs was at that part.

Jobs was way too emotional about things in reality.

 

[StuBeck]

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

Barely touched anything on the CarPlay front from what I've seen.

 

[James_C]

This sounds familiar, $10bn on a secret R&D Car project

Tim's new Tumbler

 

[Rogifan]

So the New York Times says the project failed because Apple couldn’t deliver on the autonomous/self driving software. So why do people think Apple goal was/is to provide software for other automakers? It seems like the issue wasn’t building a car it was building one that was autonomous. Apple wanted to change the space not just sell a luxury EV ala Rivian.

 

[haydn!]

It’s a huge sum of money, obviously. But Apple is a company that always talks in billions when it comes to finances, and never millions so it’s to be expected.

And to those offering comparisons, or saying there is little to show for it. Of course, in terms of a finished car - there’s nothing to show for it. But there is no telling what innovation there is behind the scenes that could quite easily make its way into other products, both Apple’s own and third parties through patent sharing/trading/licensing.

 

[Rogifan]

The software was always going to be the Apple Car strength, and the software can be made available to many car manufacturers. If Apple can keep pushing forward in super-intelligent car automation software, then nothing will be lost.

Whenever I see spacecraft launched, I'm still amazed at how clunky and fragile they look vs. how Apple designs sleek and streamlined products. If Apple designed a spacecraft... maybe it wouldn't tip over when landing on the moon. 🤣

And yet this article states it was the software that killed the project. Apple has never been a piece of technology and somebody else’s product. The notion that they would license a ‘CarOS’ to existing auto manufacturers is nonsense. Plus existing automakers don’t need or want someone else to provide the brains for their cars.

 

[akashagrawal]

People ITT not recognising you don't pull good ideas out of your ass. You have to try out a lot of different ideas to a reasonable milestone and give them a chance to breathe before evaluating whether that's worth pursuing. A company of Apple's size has several big and potentially costly projects running at all times, many of which likely won't see the light of the day. That's part of the cost of that one good idea that might disrupt the industry like iPhone, airpods, apple watch and M-processors did.

While the latter 3 aren't as big of a game changer as iphone, each of them more or less redefined how that product category iis done and forced competitors to play catchup. They still haven't caught up with apple watch in terms of overrall app base and developer interest. M3 still leads the power/efficiency ratio. There are faster processors, but not with that great a battery life.

 

[wanha]

Wait, I've got questions:

Based on the NYT report, the Apple Car project failed because:

1. "it was doomed from the start"

2. "it never have the right leader"

3. "Apple were never able to develop autonomous driving"

I'd like to know which one is it?

When a project as big as this fails, it's super easy to point fingers.

(I experienced this with the downfall of Nokia and how everyone believes their version of why Nokia failed is the correct one, but that simply can't be true.)

Pointing a finger means ultimately nothing, but most people are going to believe whichever finger most aligns with their pre-existing biases.

 

[Mac Fly (film)]

Apple lost their balls.

 

[GrayFlannel]

Apple had the opportunity to buy Tesla but never allowed that ship to leave the dock. In hindsight that cost them roughly $600b at a minimum. Then the tax break game changed in 2022 forcing companies to capitalize and amortize their R&D.

 

[Mac Fly (film)]

Wait, I've got questions:

Based on the NYT report, the Apple Car project failed because:

1. "it was doomed from the start"

2. "it never have the right leader"

3. "Apple were never able to develop autonomous driving"

I'd like to know which one is it?

When a project as big as this fails, it's super easy to point fingers.

(I experienced this with the downfall of Nokia and how everyone believes their version of why Nokia failed is the correct one, but that simply can't be true.)

Pointing a finger means ultimately nothing, but most people are going to believe whichever finger most aligns with their pre-existing biases.

NYT is talking a lot of bull.

 

[Mac Fly (film)]

Apple had the opportunity to buy Tesla but never allowed that ship to leave the dock. In hindsight that cost them roughly $600b at a minimum. Then the tax break game changed in 2022 forcing companies to capitalize and amortize their R&D.

The company Apple was talking to isn't the same company today. There was no way to predict these things. Apple decided it would be difficult to mix cultures between the two companies, essentially because Elon's personality is too strong and Tim has his own way. I still don't have conclusively proof this car project was cancelled because I take all "news" as barely half-truth these days... but if it is true I see it as a missed opportunity and a sad day. Steve was talking about building a car twenty years ago and I'm confident he would have the balls to take this project to fruition. Tim is clearly not the same kind of leader and lacks Steve's confidence and ambition.