Apple Inc., the tech giant notably known for designing and manufacturing the high-end iPhone line of smartphones among other electronic products and internet services is on course to produce a self-driving passenger car by 2024. Sources at the tech firm said that this vehicle could include Apple’s breakthrough battery technology.
It should be noted that Apple conceived the idea and plan of designing and manufacturing cars from scratch in 2014 under Project Titan, but progress was stalled when the company decided to focus on software and reassessed its goals.
In 2018, the company’s vehicle design plans were taken off the shelf and back to the design table with the return of Apple veteran Doug Field, who had worked at automaker Tesla Inc. Doug restructured the Project Titan design team and laid off 190 people in 2019.
Since then, there has been (silent) progress of the project as the company looks at building a vehicle for consumers.
Breakthrough battery technology
At the core of this car design is Apple’s breakthrough technology. Insiders say that this new battery design could significantly reduce the cost of batteries and increase the vehicle’s range.
Apple plans to use a unique “monocell” design for the battery that will go into its car. This monocell bulks up the individual cells in the battery and frees up space inside the battery pack by eliminating pouches and modules that hold battery materials, which means that more active material can be packed inside the battery.
If this is done, the battery increases the range of the car. Apple is also investigating the chemistry for the lithium iron phosphate (LFP) battery, which is likely not to overheat making it safer than other types of lithium-ion batteries.
A source close to the design team who preferred anonymity because these plans are not yet in the public domain said that this battery technology is “next level, like the first time you saw the iPhone.”
At the time of this writing, it is unclear who is going to assemble Apple car. Sources inside the company revealed, as reported by Yahoo Finance, that Apple is expected to outsource a manufacturing partner to build the vehicles. Additionally, Apple would decide to have their driving system integrated with a car made by a traditional automaker, instead of the tech giant selling an Apple-branded car, in an effort to scale down on the scope of the project.
Previously, Apple had unfruitful talks with Magna International Inc. about manufacturing a car. One person privy to those engagements between the two companies said that the talks didn’t bear any fruits because Apple’s plans were unclear at that moment.
Insiders also revealed that Apple has decided to outsource suppliers of some parts that are needed for the design of the car, including lidar sensors, which help self-driving cars get a 3D view of the road.
However, there is also the possibility of Apple to use some of its own internally developed sensors similar to those that were included in the latest iPhone range of products – the iPhone 12 Pro and iPad Pro. This is because Apple’s car might feature multiple lidar sensors for scanning different distances.
As mentioned earlier, Apple has had plans of designing and building a car since 2014. Therefore, if the project progresses as planned, it will be 10 years in 2024 when the idea materialises into a finished product, the Apple car. The COVID-19 pandemic could even push that to 2025.
Although Apple is a trillion-dollar company with pockets to fund marketing campaigns for its products all over the world, it is not guaranteed that the car production division will be profitable overnight. Yes, Apple has been around for more than four decades and it is a household name in electronics but it will be a newcomer in the automotive market.
For the venture to be profitable, automotive contract manufacturers every so often ask for big volumes that could challenge Apple, however big the company is. This volume is estimated to be 100,000 vehicles annually.
To put this into perspective, you might want to look at Tesla as an example. With the company’s big financial muscle, the Elon Musk-led automaker took 17 years to make a sustained profit making cars.
Reaction from Apple investors
After hearing the news of Apple’s progress with its Project Titan, its shares rose 1.24%. However, there was caution from some investors. One such Apple investor is Trip Miller, the Managing Partner at Gullane Capital Partners, who said that Apple could find it hard to produce large volumes of cars out of the gate.
Trip suggested that it would be better for Apple to develop an advanced operating system or battery technology and have it utilized in a partnership with an existing manufacturer under license. This is because, Miller said, “having a very complex manufacturing network around the globe doesn’t happen overnight,” citing Tesla’s development.
On the other hand, Hal Eddins, the Chief Economist at Apple shareholder Capital Investment Counsel is both optimistic and pessimistic.
Although Apple has a history of higher margins than most automakers, Eddins said his initial reaction as a shareholder to the news was, “Huh? [I] still don’t really see the appeal of the car business, but Apple may be eyeing another angle than what I’m seeing.”
With all that in mind, I am quite excited to see Project Titan’s results come 2024. I am more excited to see whether the “iCar” will have windows.