Apple has halted development on its electric car project, according to a source familiar with the matter, marking the end of a decade-long endeavor since the iPhone maker first initiated the project.
Despite this setback, Apple’s shares experienced a slight uptick of 0.7% in afternoon trading, showing resilience amid the news.
Reports indicate that several employees involved in the electric car project will transition to Apple’s artificial intelligence (AI) division, a move aimed at reinforcing the company’s focus on AI development.
Ben Bajarin, CEO of Creative Strategies, consulting firm noted that this shift underscores Apple’s commitment to enhancing its AI capabilities, potentially boosting investor confidence in the company’s future endeavors.
While tech giants like Alphabet and Microsoft have made significant strides in integrating AI into their products and services, Apple has remained relatively restrained in this arena. The company’s decision to reallocate resources to its AI division may signal a strategic shift in its technological priorities.
Despite initial optimism surrounding the electric car project, Apple’s decision to pivot away from it reflects broader challenges facing the automotive industry.
High interest rates aimed at curbing inflation have dampened consumer sentiment and slowed demand for electric vehicles, prompting industry-wide adjustments, including job cuts and production reductions. Even market leader Tesla has recalibrated its investment strategies, opting to focus on hybrid vehicles over fully electric models.