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21 July, 2024

Apple u-turns on EVs, shifts gears to focus on AI

Decade-long project halted as Apple redirects focus to artificial intelligence amid shifting market dynamics


Apple has reportedly halted its decade-long secretive project to develop electric vehicles (EVs), redirecting efforts towards its artificial intelligence (AI) division.

According to a BBC report, the project, known as the Special Projects Group under CEO Tim Cook's Project Titan, involved around two thousand employees and incurred billions in research and development costs. Although Apple never publicly confirmed the project, recent reports suggest the team will now pivot to AI initiatives.

Market analysts see this move as strategic, emphasizing the surging demand for AI over electric vehicles. Ray Wang, CEO of Constellation Research, called it a "smart and long-awaited decision," citing the robust growth of the AI market. Apple's exploration of new frontiers beyond iPhones and computers includes ventures like the Vision Pro virtual reality headset. Meanwhile, the decision aligns with a broader trend as other automotive giants, such as Ford and General Motors, also reassess and delay EV production plans due to increased market competition.

The shift in focus to AI reflects a dynamic industry landscape, with Counterpoint predicting over 100 million shipments of generative AI smartphones by 2024, potentially surpassing 500 million by 2027. The move away from EVs comes amid slowing demand in the market, driven by high borrowing costs and intensified competition. Electric truck manufacturer Rivian recently announced job cuts and stagnant production growth. Tesla, a leader in the EV sector, acknowledged weaker sales growth for the year and responded to Apple's decision with emojis on social media, emphasizing the competitive dynamics of the evolving automotive industry.

Source: BBC

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