Apple`s Failed Electric Car Project

Case Code: BSTR680 Case Length: 16 Pages Period: 2023 Pub Date: 2024 Teaching Note: Available

Price: Rs.400 Organization : Apple Incorporated Industry : Technology & Communications Countries : United States Themes: Diversification Strategy, Project Management, Strategic Leadership

Abstract Case Intro 1 Case Intro 2 Excerpts

Excerpts

Beginnings of Project Titan

Apple’s electric car project was the brainchild of Jobs. In an interview with international news agency Bloomberg LP (Bloomberg) in 2008, Tony Fadell (Fadell), the then senior vice president at Apple, said that while on a walk, he and Jobs had asked each other hypothetical questions such as what their ideal car would be. Fadell added, “If we were to build a car, what would we build? What would a dashboard be? And what would this be? What would seats be? How would you fuel it or power it?” Fadell said he and Jobs felt that cars and mobile phones were similar in many ways such as having a mechanical structure and motor, batteries, and a computer. Hence, for a company such as Apple which made iPhones, it made a lot of sense to develop cars..

Why project titan?

According to NPR Tech correspondent, Bobby Allyn (Allyn), Apple decided to give EVs a try since it was one of the most advanced technology companies in the world. Allyn added that by launching EVs, Apple felt that it could pose a competition to Tesla in the EV segment. He added that Apple also realized that it should do more than just develop iPhones. So, to keep growing and make more profits, the company launched a secret project, Titan, in 2014.

Though Apple never made any public announcement about its EV project, the company started testing its EV prototype on public roads. It also filed for some public patents which led to people knowing that it was trying to develop an EV.

Apple’s EV Protype

While developing its EV prototype, Apple created several versions. One of the initial prototypes looked like a bread loaf – a mini-van with a glass roof. This was followed by an I-beam – a pod shaped vehicle lacking front and rear windows. However, none of these prototypes made it to the production stage. In one of the other versions, Apple planned to develop a car with the wedge pointing downward. In 2020, another prototype was conceptualized that had a design which looked like the Lifestyle Vehicle from California-based EV development company Canoo Inc. In this model, passengers sat facing each other as in a limousine. Impressed with the design, Cook and Williams gave their commitment to pushing the project forward..

Initial Hiccups

After the Apple EV project was announced, a few challenges cropped up. Initially, when Zadesky was leading the EV project, he focused on creating an electric car which could compete with Tesla. On the other hand, Ive wanted to develop a self-driving car, which would have fully autonomous driving capabilities.

Though Apple hired hugely talented employees from renowned organizations such as German automaker Porsche and NASA , Project Titan faced several obstacles. The company faced resistance from key executives such as Luka Maestri, chief financial officer, Apple; and Craig Federighi, software engineering chief, Apple, who were of the view that the Apple EV project was a vanity project.

Apple Abandons Project Titan

After the Apple EV project was announced, a few challenges cropped up. Initially, when Zadesky was leading the EV project, he focused on creating an electric car which could compete with Tesla. On the other hand, Ive wanted to develop a self-driving car, which would have fully autonomous driving capabilities.

Though Apple hired hugely talented employees from renowned organizations such as German automaker Porsche and NASA , Project Titan faced several obstacles. The company faced resistance from key executives such as Luka Maestri, chief financial officer, Apple; and Craig Federighi, software engineering chief, Apple, who were of the view that the Apple EV project was a vanity project.

Looking Ahead

Apple received huge criticism for spending US$10 billion on R&D from 2014 to 2024 and then finally scrapping the EV project. However, the company believed that the knowledge learnt from developing an EV could be used in its AI division and other technologies which were being researched including air pods with robot assistance, cameras, and augmented reality, in future. Some employees working on Project Titan appreciated the shutdown of the project as they believed that generative AI would be invaluable in future for its crucial iPhone business.

Exhibits

Exhibit I: Apple’s Line of Business
Exhibit II: Apple’s Five-Year Financial Summary
Exhibit III: Market Share of Players in Global EV Market (2023)
Exhibit IV: A Brief Note on the Slowdown in the Global EV Sales
Exhibit V: Quarter Sales of Electric Vehicles (Globally)
Exhibit VI: A Brief Note on Outlook for the Global EV Market

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