Apple Inc. is canceling a decade-long effort to build an electric car, according to people familiar with the matter, abandoning one of the most ambitious projects in the company’s history.
Apple made the revelation internally on Tuesday, surprising the nearly 2,000 employees working on the project, said the people, who asked not to be identified because the announcement was not public. The decision was reportedly shared by COO Jeff Williams and Kevin Lynch, vice president in charge of the initiative.
The two executives told staff that the project will begin to wrap up and that many employees on the team working on the car — known as the Special Projects Group, or SPG — will be moved to the artificial intelligence division under the leadership of executive John Giannandrea. Those employees will focus on generative AI projects, an increasingly important priority for the company.
The Apple Car team also has several hundred hardware engineers and automotive designers. It’s possible they may apply for jobs on other Apple teams. There will be layoffs, but it’s unclear how many.
Apple, based in Cupertino, California, declined to comment.
The move was a relief to some investors, who pared the stock’s declines on Tuesday. Shares gained about 0.5% to $182.01 at 2.18pm in New York after Bloomberg reported the news.
Elon Musk, head of Tesla Inc., also celebrated the transition. He posted about X with a greeting emoji.
The decision to permanently shut down the project is a bombshell for the company, ending a multibillion-dollar effort that would have taken Apple into an entirely new industry. The tech giant began working on a car around 2014, aiming for a fully autonomous electric vehicle with a limousine-like interior and voice-guided navigation.
But the project has struggled from the start, with Apple changing the team’s leadership and strategy several times. Lynch and Williams took over the business a few years ago – following the departure of Doug Field, now a senior executive at Ford Motor Co.
The decision to shut down the project was reportedly made by senior Apple executives in recent weeks. This comes just a month after Bloomberg News reported that the project had reached a turning point. The most recent approach discussed internally was to delay the release of a car until 2028 and reduce autonomous driving specifications from Level 4 technology to Level 2+.
More recently, Apple had guessed the car would be priced around $100,000. But executives were concerned about whether the vehicle would be able to deliver the profit margins Apple typically enjoys on its products. The company’s board was also concerned about continuing to spend hundreds of millions of dollars a year on a project that may never see the light of day.
Apple continues to invest heavily in other areas. Over the past five years, the company has spent $113 billion on research and development, with an average annual growth rate of about 16%. The company also recently launched Vision Pro headphones, its first new product category in nearly a decade, and has been building on that business.