Apple cancels plans to build an electric car

Apple will wind down its team working on electric cars, called Special Projects Group, according to Bloomberg.

The news signals an end to Apple's secretive effort to build a car to rival Tesla. The program employed thousands of employees but never fit with Apple's core business of electronics and online services, and raised questions about where Apple would turn for the manufacturing of a vehicle.

Reports of Apple's ambition to build a car first surfaced in 2014 after the company recruited automotive engineers and other talent from auto companies. While there was little public information about Apple's plans, the company operated a program with autonomous Apple-owned cars equipped with sensors and safety drivers cruising around the San Francisco Bay Area.

Apple's Special Projects Group had several reorganizations over the years, including layoffs in 2019, when employees were moved to different parts of the company. Some Apple employees in the car division may move to a generative artificial intelligence team, according to Bloomberg.

The company has other automotive-related projects, including its infotainment CarPlay software, which Apple says is installed on 80% of new vehicles.

Apple's car project was part of an internal effort to look for technologies the company could develop with huge potential markets. Apple continues to develop health technologies, especially for the Apple Watch. And last month, the company released its first virtual reality headset, the Vision Pro.

Some of Apple's Asian rivals in smartphones have invested heavily in designing and potentially manufacturing cars. Xiaomi, a maker of Android smartphones, announced a new electric vehicle this week. Foxconn, Apple's main manufacturing partner, said last year it will build electric vehicles.

Apple and CEO Tim Cook never acknowledged the car project publicly, instead referring to it as work on "autonomous systems." In 2016, Cook was asked by a shareholder about the project, and teased that "it's going to be Christmas Eve for a long time."

As part of its silence, Apple's hasn't outlined its expenditures in the auto space. Overall, the company spent about $30 billion on research and development in 2023, a 14% increase over the prior year. Apple's R&D budget includes investments in new software and features for its existing products such as the iPhone.

Apple shares rose less than 1% on the news on Tuesday. Apple declined to comment.

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