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

[notabadname]

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.

Tesla vehicle values have plummeted as much as 40% on some models. And Tesla has lost billions.

If You Bought A Tesla One Year Ago It Has Lost As Much As $40,000 In Value - Jalopnik

“Buying a car today is an investment into the future. I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset, not a depreciating asset.” Elon Musk said that in 2019, and like many of his bold vision statements, has continually been proven...

jalopnik.com

Tesla Prices Are Falling Fast – Three Times Faster Than the Market Average - iSeeCars.com

Tesla pricing...

www.iseecars.com

Tesla has lost over $94B in market valuation so far in 2024, and Jeff Bezos is threatening to steal Elon Musk's crown as the world's richest person

The valuation hit is the biggest ever for Tesla, dinged by price cuts in China and Hertz’s EV sale.

fortune.com

 

[Gauntlet999]

Almost $4T in revenue over the past 10 years, $10B is pocket change…

 

[thebeans]

Well….$10B over 10 years so $1B per year. Based on iPhone sales of 200M per year that would be $50 per device. I know yearly sales over the last 10 years have probably averaged more than 200M so actual number is likely less than $50.

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

 

[I7guy]

While Tesla is doing well as the major player in a growth market, it remains to be seen how they do as the market matures.

As major company's move Ito EVS, Tesla will face pressure on two fronts:

1. Increased competition putting pressure on price
2. Loss of carbon credit sales fueling revenue and profits as companies needs for them lessen.

Right now, Tesla is pretty much the only game in town so they need not come up with more models, updated designs, etc. as often as others. It will be interesting to see how the market plays out as EVs eventually become more mainstream. Will they sustain those margins? How will they deal with repairs as more Teslas are sold? I'm not saying they won't survive but we've likely seen peak margin for them.

Tesla is apple. They already have the best selling car in the world. While GM is hand building a $350K electric Cadillac Escalade, Tesla is focusing on the affordable model 2.

As for Rivian, Tesla wasn't exactly profitable for along time, despite carbon credits; personally I think the are a candidate for being bought by one of the majors at some point.

Rivian and lucid are both bleeding money.

As for Apple, in the end, I think it was a good decision not to try to enter the car market and compete with what most likely would be a high end model where Apple's brand would wind up competing with known brands that have a lot more cache than Apple would in that market. They're likely better of licensing technology and patents than building their own car.

Probably.

Which is what is good now for Tesla, but as the majors move more into EVs I think Tesla will face pressures at both ends of the market that will present challenges for them.

These majors have to be in the $25k range and drive like something worthwhile. A $60,000 be isn’t the idea of mass affordability.

Right now, most companies are cautiously testing the water and not going all in because they just don't see enough of a market to support the costs, IMHO. There are some interesting EVs. I had a chance to drive BMW's 5 series EVs on a track and tehy are amazing, plus they are a BMW.

And they are not for mass consumption. Sure you want to spend north of $70K on an ev go for it. But tax credits are great as well.

I'm just going by my anecdotal experiences from friends comments where range anxiety is the biggest reason they wouldn't buy an EV even though they could afford any on the market. I also know some people who own Teslas and complain about range and charging availability to the point they ditched them. If anything PHEVs seem to be of more interest and may very well be the bridge solution as battery technology increases tehir range and charging stations more convenient and charging faster.

I live in the state that is third in ev adoption. Everyone I know that has an ev also has l2. One has to know how to plan for a trip in an ev, similar to a gas vehicle. I know people say it, but that doesn’t mean the masses believe it. PHEVs are the worst of ice and bevs combined.

I love driving my Tesla model 3 long range. It’s my daily commuter. Costs about $1 a day. And after all credits $38K. My spouses crv was over $36k.

 

[TechnoMonk]

Tesla vehicle values have plummeted as much as 40% on some models. And Tesla has lost billions.

If You Bought A Tesla One Year Ago It Has Lost As Much As $40,000 In Value - Jalopnik

“Buying a car today is an investment into the future. I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset, not a depreciating asset.” Elon Musk said that in 2019, and like many of his bold vision statements, has continually been proven...

jalopnik.com

Tesla Prices Are Falling Fast – Three Times Faster Than the Market Average - iSeeCars.com

Tesla pricing...

www.iseecars.com

Tesla has lost over $94B in market valuation so far in 2024, and Jeff Bezos is threatening to steal Elon Musk's crown as the world's richest person

The valuation hit is the biggest ever for Tesla, dinged by price cuts in China and Hertz’s EV sale.

fortune.com

Tesla has not lost billions. Market valuations are fluctuations in stock price. Google lost 70 billion in market valuation in 3 days after their Gen AI Gemini disaster, not actual money. Tesla has 16% Profit margin despite reduction in prices. Tesla can drop prices more and still make more profits than all of the EV makers. There is a reason, GM, Ford Mercedes, Volvo and others are scaling back on EV. Tesla can drop prices further and watch others implode and still make money.

 

[KPOM]

"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

How well did the Lisa sell?

 

[acader]

WOW!!! $10B. Was this including a prototype that Apple might have built?

I thought building prototypes or concept cars with a fully re-imagined ICE costs around $100M on the high side and $150M on the "lets go crazy" side. But $10B??

 

[Skyscraperfan]

$10 billion seems tiny compared to the $75 billion fine Apple faces if the EU comes to the conclusion that Apple did not meet the demands of the EU about third party app stores.

 

[Mac Fly (film)]

$10 billion seems tiny compared to the $75 billion fine Apple faces if the EU comes to the conclusion that Apple did not meet the demands of the EU about third party app stores.

Don't bring the EU into this thread or it'll just get me annoyed, ha.

 

[Frankied22]

$10 billion just to figure out a car is too much hassle, and they can just inject themselves into most cars via CarPlay. Good job Tim Apple.

 

[victorvictoria]

As a customer I'd like to say screw Tim Cook. Because the software quality has been pretty bad across the board with bugs, and Apples services have been breaking down seemingly weekly at present. Not how a company with a 700% increase in capitalisation should be treating its customer base.
For the love of God they can at least fix the timer app so when I have one saved timer, when I click on it I get it and not the last timer I deleted instead!!!

As as customer, it's logical that you'd complain about issues you've encountered with Apple software. From a shareholder viewpoint, no one has any reason to complain, unless they shorted shares instead of buying.

 

[Analog Kid]

View attachment 2354103
I rest my case!

One of my favorite Macs of all time, actually... I clung to mine for 9 years.

2013 is a great time to remember though as it relates to these kinds of things. To the extent that people loved it, it must have been because Jobs started the development before he died, and to the extent people hated it it must be a sign that Cook couldn't lead.

 

[victorvictoria]

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.

Your original comment started with the words "As a SHAREHOLDER." Have you forgotten that you opened the door? And the reply was "as a SHAREHOLDER, you have no complaint. SHAREHOLDERS have made fortunes and should not preface their complaints about the company's when they're obviously not competent to run a $3 trillion corporation. And Tim Cook obviously is. Numbers don't lie.

In future, if you want to grouse about Apple's direction, I suggest you preface your complaints with, "As a long-time Apple User/consumer..."

You're welcome

 

[theluggage]

iPhone sales flat. Car cancelled. AVP better knock it out of th--

Never mind.

Alternatively, Apple should have avoided taking any risks and stuck with the Apple II... look at all the money they wasted on the Apple III, Lisa, Newton (while St Jobs was having a flop with NeXT), Quicktake, Pippin, eMate, that Motorola iTunes phone, the Mac Cube...

Those who make no mistakes usually make nothing. The trick is to only make mistakes that you can afford to pay for.

It's easy to be skeptical about things like the car and AVP, and Apple could do with an insurance policy against the day when the fickle finger of fashion loses interest in the iPhone but, quite frankly, I wouldn't want to guess where the "next iPhone" is coming from (If I could, I wouldn't be sitting here posting about it...) - still, plenty of other companies have managed to survive without ever having an iMac/iPod/iPhone moment.

If electric and self-driving cars had worked out on the ~5-10 year timescale that the optimists predicted, they would have been huge by now - and would have had massive spin-off benefits from whoever had the winning tech in the form of advertising ("take me to a grocery store") and the need for integration with phones/watches etc. I think the reality is beginning to dawn that both BEVs and autonomous driving are going to be 90% ready for many years while technology, public attitude and infrastructure catch up. Autonomous driving, in particular, isn't going to be safe to roll out until it is 100% done and its legal to hop in your car, crack open a beer and play Tetris while the computer does the work. Still, the smart money didn't seem to know that 5-10 years ago, and Apple would be looking really silly right now if Google or Tesla has cracked the problem and were using it to lock people into their Androids or Teslaphones.

...as it is, Apple are probably now sitting on a nice little patent portfolio that they can start to assert when some other mug has lobbied the government into installing millions of chargers and re-building the road network in self-drive friendly form.

 

[Analog Kid]

$10 billion just to figure out a car is too much hassle, and they can just inject themselves into most cars via CarPlay. Good job Tim Apple.

$1B a year from a $400B cash flow to ensure they have a bite at hundreds of billions more. Imagine if RIM put a little bit of their R&D budget into a software keyboard, or if Kodak put a fraction of a percent of their revenue into digital imaging.

Or if Apple had said "we're a computer company, we shouldn't be investing in music players and phones".

If you've got $155B in the bank in 2014, it would have been criminal to not invest in the biggest software challenge of the era.

 

[Avatar74]

Those who make no mistakes usually make nothing. The trick is to only make mistakes that you can afford to pay for.

Correct.

 

[Avatar74]

Given that they make ten times that amount in just one year … 1% lower prices?

As I said elsewhere in response to the same point: Price is not a function of COGS anyway.

That's something math nerds love to imagine but it's just not how product pricing works.

 

[Avatar74]

10 billion is a lot considering Apple paid slightly north of 20 billion in taxes.

$10 billion over ten years... They paid $17 billion in tax in a single year.

 

[Analog Kid]

While GM is hand building a $350K electric Cadillac Escalade, Tesla is focusing on the affordable model 2.

To be fair, while GM is hand building the Escalade, Tesla is hand building the cybertruck...

Tesla has 16% Profit margin despite reduction in prices. Tesla can drop prices more and still make more profits than all of the EV makers. [...] Tesla can drop prices further and watch others implode and still make money.

Tesla's margins are now in line with other automakers. Yes, Tesla has first mover advantage in EVs, but as EVs become more mainstream they're going to have to come to terms with the car side of making a car while the other automakers have to find lithium suppliers.

I fully expect the EV market to level out and that we'll find Tesla has been massively overvalued. They grew incredibly quickly to fill a niche, but they don't have any real magic other than chutzpah. That appealed to early adopters, but mass market?

There is a reason, GM, Ford Mercedes, Volvo and others are scaling back on EV.

Maybe, but that reason certainly isn't that they decided the future is EV and Tesla owns it so they may as well give up and just focus on selling spare parts to collectors of outdated combustion vehicles.

 

[Analog Kid]

Well….$10B over 10 years so $1B per year. Based on iPhone sales of 200M per year that would be $50 per device. I know yearly sales over the last 10 years have probably averaged more than 200M so actual number is likely less than $50.

Math fail...

 

[Analog Kid]

$10 billion over ten years... They paid $17 billion in tax in a single year.

And less tax because they get a credit for R&D.

 

[farmboy]

I wonder what happened.

Honda unveiled a hydrogen fuel cell car, Mercedes Benz cancelled their EV, Apple cancelled their car, and Chevy is back peddling on hybrids -- all within like a week.

Nothing happened.

The Honda hydrogen, long under development, has only a very, very, very limited market because there are virtually no hydrogen stations, maybe a few in California or Japan. Toyota tried that before and failed, perhaps because hydrogen, while about 65 mpg, is about $16/gallon. See the Toyota Mirai. By the way, the Honda hydrogen car was co-developed by...GM. Maybe in some distant future that fuel works out.

Mercedes did NOT cancel their EV, they just said they would be delaying becoming a fully EV-only brand because their ICE and hybrids are still selling well.

GM just said in January that they are bringing back plug-in hybrids to the market. That's not "backpedaling".

 

[farmboy]

Instead of trying to create a startup car company with the hundreds of billions in tooling and labor costs, here's an idea:
How about getting existing carmakers to integrate iOS into the entire auto's OS? You know, "turn on the windshield wipers," "turn down the seat heater," "zero out trip odometer," "change drive mode to 'performance'," Turn the A/C up to maximum." "Unlock the Doors, start the car and roll down the windows." (from the house)."

That's right in Apple's set of core competencies, and a way to leverage all that R&D for maximum profit, and return to shareholders. And it's something Jobs would tell you is "insanely great!"

Some of these things can be done in a car already (I have a Toyota and Honda that have it), while others require simply pressing a switch, which should not be taxing for a driver. Some voice controls require you to hold the "Voice" button on the steering wheel before giving the command, assuming you've first turned down your radio and no one else in the car is talking.

So to me the ergonomics are not all that advantageous. I use it almost solely to make calls.

 

[erkanasu]

Hmmm... No weather. No hills. The kind of wide, regular road grid only found in a young desert city. Mostly low rise architecture. Vehicles carrying probably close to a quarter million dollars in sensor equipment on their roof. And still a less than great record.

"Does Waymo drive on the freeway?
So far, Waymo vehicles only drive on freeways with a Waymo employee in the car."

MSN

Driverless cars stalled on Phoenix area roadways aren't malfunctioning. That's how they're designed

Waymo releases few details about operations for its autonomous vehicles in metro Phoenix, including the exact number of vehicles on Valley streets.

www.azcentral.com

That in itself is a problem:

A Cruise robotaxi dragged a pedestrian in S.F. Now we know why the car didn’t stop

UPDATE: Cruise lays off contract workers responsible for maintaining its robotaxis For weeks, a key question surrounding the Oct. 2 crash involving a Cruise robotaxi remained unanswered: Why did the driverless vehicle continue to drive, trying to pull over, while a woman was pinned under its...

www.msn.com

Don't get me wrong, this is a hard problem and we're making incremental progress, but we are a long, long way from driving home on a snowy winter night in Chicago.

Good push back. Yes AZ roads are easy.

 

[I7guy]

To be fair, while GM is hand building the Escalade, Tesla is hand building the cybertruck...[…]

Sure, but Tesla is making money on every vehicle sold and will eventually get the production line up to snuff on the cyber truck. Unlike GM which is losing billions in its EV department.