Electric Car Project: Apple’s Quest for Manufacturing Partners
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The secret is out—as many had long speculated, Apple Inc. is working on an electric car project. Known as Project Titan, Apple’s car project could be a disruptive force in the automotive industry. Its goal would be to rival competition from both upstart electric vehicle makers, such as Tesla and Lucid Motors, as well as established auto companies.
The Search for the Right Electric Car Manufacturer
Apple is now looking for a manufacturing partner. Several traditional automakers have emerged as potential candidates. Hyundai and Kia recently attracted media attention, after Hyundai confirmed that it was in discussions with Apple in early January 2021. Hyundai shares soared 24% upon the announcement. Both companies have U.S. manufacturing operations, in Alabama and Georgia respectively.
Apple had specifically been in talks with Kia, a Hyundai subsidiary, about developing an autonomous, self-driving electric car for Apple in Georgia. The talks with Kia have since stalled. Upon the news breaking of the halted talks in February, shares of Hyundai fell 6% and shares of Kia dropped 13%.
Nissan has since emerged as a potential partner. The established car maker has signaled its desire to take part in new technology initiatives. Chief Executive Officer Makoto Uchida reiterated this sentiment, commenting: “we need to take new initiatives and “work with companies that are knowledgeable, with good experience, through partnership and collaboration.” The Japanese car company’s recent sales numbers have been unremarkable, and a partnership with Apple could attract higher-paying customers. A potential advantage Nissan has is that it already shares an electric car platform with Renault, its French partner.
The eagerness of traditional automakers to pitch themselves to Apple reflects a broader shift in attitude. Not too long ago, established car manufacturers looked upon Silicon Valley’s car projects with a degree of skepticism. They have since come to embrace these efforts. As cars increase in technological complexity and gradually evolve into a rolling personal device, car makers have sought out collaborations.
A Project Long in the Making
Speculation that Apple was pursuing an autonomous vehicle project first took shape in 2014. Rumors circulated that Apple had upwards of 1,000 employees working on autonomous vehicle development at a secret location near its main headquarters. However, the project struggled to take off for a number of years due to leadership challenges and a lack of clear direction.
The project appears to have made notable strides in recent months. Under the leadership of John Giannandrea, Apple’s head of AI and machine learning, Project Titan has found a clearer sense of direction. The Silicon Valley tech company has hired multiple former Tesla executives, including Tesla’s former self-driving chief. Apple also reported that it more than doubled road testing of its autonomous vehicles in 2020. Despite this progress, Apple still remains at least five years away from launching a self-driving electric car.
Competition from Other Electric Car Companies
Other technology giants have already made strides to advance connections with car makers. The rivalry between technology companies primarily centers around competition to push their cloud-computing tools onto car companies. In February 2021, Alphabet signed a six-year partnership agreement with Ford Motor Co. The deal will embed Google’s Android system into all Ford models outside of China starting in 2023. For years, BlackBerry had provided the display system for Ford’s vehicles.
Similarly, Microsoft entered into an agreement to provide its Azure cloud-computing system to Volkswagen AG and General Motors. Amazon Web Services (AWS) and Toyota struck a deal in August 2020 to help Toyota build its cloud-based data services.
Apple is also seeking to build partnerships with suppliers for electric car development. Foxconn Technology, the Taiwan-based company that already assembles the majority of Apple’s iPhones, is a leading candidate to act as a supplier for its car project. Foxconn has established a car venture arm. The Taiwanese manufacturer has already confirmed a partnership with Chinese automaker Geely to provide production and consulting services. Foxconn has been ramping up its electric vehicle production capabilities in an effort to attract collaborations with other auto companies.
Magna, the third-largest auto supplier in the world, is another logical candidate. Based in Ontario, Canada, Magna already produces a full suite of car components. They are also investing heavily in AI. Magna recently announced that it is partnering with Fisker, a luxury hybrid electric vehicle maker, to develop an Advanced Driver Assistance System (ADAS).
Looking Ahead to the Future
Despite the recent hype around Apple’s active search for one or more production partners, the project still has a long way to go. Apple lags behind its competition in the autonomous vehicle space. It remains to be seen how far Apple’s scale and technological capabilities can push it ahead of the competition and make up for lost time on developing its self-driving car.