Not long after launching the first iPhone, Steve Jobs was mulling what came next for Apple.
As early as 2008, one idea suggested to the company’s late chief executive was building a car.
So began Apple’s long, on-again-off-again, exploration of building a passenger vehicle. The Mac-maker has flirted with electric cars, autonomous driving and in-car systems for the best part of a decade.
Last month, the prospect of an Apple car shifted gear again after Reuters reported an electric vehicle was pencilled in for 2024 with a next generation battery design.
While the report added tens of billions of dollars to Apple’s share price, most analysts remain sceptical about what the future holds for a so-called “iCar”.
Richard Windsor, an independent technology analyst at Radio Free Mobile, says the idea that Apple is close to building a consumer car is “dubious”. “Maybe they have built a prototype, but it is quite possible they never intended to build a car for sale – to explore ‘should we build a car or not’.”
While Apple is extremely secretive about its future projects, there are plenty of clues over the last decade that it has taken a long, hard look at building a car.
“We had a couple of walks,” Tony Fadell, the former Apple designer, said in a 2015 Bloomberg interview. “If we were to build a car, what would we build? We were looking at what a dashboard would be, what would seats be, how would you fuel it or power it?”
Former Apple board member Mickey Drexler mentioned that Jobs, “if he had lived, was going to design an iCar”.
Jobs died in 2011. But by 2014, Apple under Tim Cook’s leadership had begun exploring the possibility of a car in earnest. The following year, the Wall Street Journal reported on the secretive Project Titan being developed within Apple.
On the streets of the San Francisco Bay Area, mysterious, unmarked vans loaded with scanners and cameras began appearing – spotted by fan sites as being registered to Apple.
At one stage, Apple was reported to have more than 1,000 staff working on car projects. Bloomberg reported in 2016 it had contacted Magna, a Canadian contract car manufacturer, about a run of Apple cars.
Neither was it only focusing on electric vehicles. According to the latest public data for 2019 from California’s DMV, Apple had about 70 registered driverless test cars in the state – mostly Lexus RX SUVs mounted with Lidar laser systems developed by Velodyne.
Hands-free car
According to city documents from the Silicon Valley Business Journal, Apple has also leased building space near Sunnyvale for its car efforts. The buildings are named for Greek mythology – Zeus, Rhea, Athena – fitting for “Project Titan”. It even acquired a self-driving car start-up, Drive.AI, in 2019.
But from what little is known about the project, Apple’s car efforts have not always had a smooth ride. The project’s leadership has changed several times, according to various LinkedIn profiles and reports. The original chief, former Ford executive Steve Zadesky, left Apple in 2019.
In February that year, Apple filed a notice with California’s employment bureau that 190 staff were leaving. It had previously confirmed it had an “incredibly talented team working on autonomous systems”, but some were being moved to other parts of the business.
Data published under rules to monitor autonomous cars has also led some analysts to question how much progress it is making. Cars running autonomous vehicle projects are required to submit how many miles they have travelled and how often the car “disengages” from autonomous mode – how often a safety driver has to step in or the system stops working.
About | Vehicle autonomy levels
Apple is said to have driven 78,605 miles in 2018, but that number fell to 7,544 miles in 2019 and only 23 of its 70 cars actually drove at all. Apple was also found to have a relatively high number of disengagements, compared to its rivals.
Apple’s driverless cars have also been involved in the odd bump and scrape on Californian roads, according to accident reports. In the most recent incident in 2019, one self-driving Lexus was apparently rear-ended while stationary.
With all this evidence, it is clear Apple has long maintained an interest in cars and autonomy. But how likely is its car? And if it isn’t building one, what is it doing?
Philippe Houchois, a Jefferies analyst who covers companies such as Tesla, says: “We have to give Apple’s plans some credibility, but it is a company that can afford to have a side interest.”
Software is Apple’s most likely interest for cars, in his view. Apple and Google already compete with two systems that can connect smartphones to car displays, but there is room to grow.
Windsor, the independent analyst, says mapping technology is another area that Apple’s research into cars and autonomous vehicles could play out. Apple previously licenced TomTom, OpenStreetView and other data for its Maps app. It has gradually been building its own rival to Google Maps using scans of roads from data collection cars.
As to the alleged 2024 timeline, even analysts who believe an Apple car is possible are skeptical. Ming-Chi Kuo at TD Securities says the market was “overly bullish” on the Apple’s automotive prospects, adding: “we think it is perilous to jump to the conclusion that Apple Car will succeed.” He gives a timeline of at least 2025 to 2027.
Elon Musk, the Tesla chief executive, also poured cold water on claims that Apple could build a car soon.
According to Reuters, Apple is said to have looked at a “monocell” battery – one that packs more active materials into a single cell. Musk says this is “electrochemically impossible” and “strange, if true”.
The Tesla boss also claimed that during Tesla’s “darkest days”, he approached Cook to discuss an Apple takeover of the electric car maker. But the Apple chief “refused to take the meeting”. Apple has not commented on the alleged offer.
Tesla CEO Elon Musk has said Apple's battery technology is ’electrochemically impossible‘
Credit: Aly Song /REUTERS
Despite all the scepticism, there is no denying that Apple would have the resources to develop a driverless car. It has more than $200bn in cash. And while a number of its Project Titan engineers have left, several senior car experts were added last year to its special projects group, including former NIO autonomous driving chief James Carson and Uber’s ex-head of simulations Hugh Reynolds.
Last week, Korean car company Hyundai appeared to confirm reports that it was in discussions with Apple over the two companies working together on a car. Many believe the company would be likely to join forces with a partner rather than going it alone, given the manufacturing requirements of producing a vehicle.
Hyundai, which had said discussions with Apple were at an “early stage”, quickly backtracked, saying only that it had received requests from various firms. This did little to dampen speculation, however.
The key roadblock in the way of Apple’s driverless ambitions, according to Windsor, may be profit. Making a car is simply never going to produce margins as high as its smartphones, where it has convinced tens of millions to pay a premium for its devices, or in its software efforts such as Music or iCloud.
Apple q3 sales by division
Apple’s $2 trillion valuation, he says, is underpinned by that fat profitability and a mass production run of driverless cars would jeopardise its success.
“In a moment of madness, maybe they were going to build a vehicle,” he says. “But the problem is that you can’t make a 40pc margin on a car. You can do that on a phone, but it is not going to fly when competing with a BMW 5 series.”
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