Was Apple's Car Project Doomed to Fail?

Apple is scraping its multi-billion dollar plan to release an electric vehicle, a not-so-secret project that was in the works for almost a decade. The company told employees in an internal meeting this week that the plan, known as Project Titan, has been canceled, surprising the 2,000-person team who'd been working on it, according to reports. Many of those employees will now be reassigned to Apple's generative AI projects, um, which'll be interesting to see, 'cause they have a lot less data than other people, 'cause they don't collect it. Um, you were excited about the idea of an Apple Car, Scott. Um, I'm, uh, I'm surprised they canceled it. I... Maybe they're working on software? Apple's car was initially envisioned as an EV to compete against Tesla, and later, a self-driving car rival, Waymo, which is, comes from, uh, Google, the Google folks. Elon Musk rejected, uh, reacted to Apple's news on X, posting a saluting emoji and a cigarette. I don't... Uh, whatever. Fuck you. Um, what do you think, first of all? Do you consider it a failure? Are they smart to get out of the EV game, um, even though they never said they were doing it?

So, look, a, a, a strategy and a vision is meant to be unifying, but not a suicide pact, and you were right. Two years ago, I predicted they were gonna build the most valuable waiting list in history, that this made a ton of sense, and in order to move the needle on what was then a $1.6 trillion market cap company, they would need to go after big game, and the automobile industry was big. I felt that Tesla had unearned market cap at $700 billion, or whatever it was then, and that Apple was just salivating to go after some of that. But here's the thing. When the data changes, as a good manager, you have the right and the obligation to change your mind, and a step back from the wrong direction is a step in the right direction. And you know what, Kara? This was absolutely the right decision, because in the last 12 months, the atmospherics-

Yeah.

... have changed dramatically, and let's just talk about some of those. The EV market is plateauing, if not slowing. All the projections are way overestimated consumers' pivot to EVs. Toyota's looking like a genius right now, 'cause they did not go all in on EVs-

They went hybrid-

They-

... which are popular.

That's right, they went hybrids. Tesla is running up against margin compression, and then you have, um, you have the company which is probably, um, probably the most important company that no one talks about. BYD is now outselling-

That's right.

... Tesla. So Apple-

J-... Warren Buffett has a big stake in that.

Is that right?

Yeah.

I didn't know that.

Yeah.

But let's look at the market versus where it was, say, just even two years ago, much less when this project was probably approved. You have a low margin, capital-intensive product that is subsidized. Basically, every car company in the world has either gotten federal loans, Tesla, or has been bailed out, GM and Chrysler. It's a massively subsidized industry, which makes it incredibly economically inefficient. They have this enormous competitor with a $600 billion market capitalization that is doing really well, called Tesla. They have another gigantic low-cost competitor that's actually outselling Tesla right now, and the consumer seems to be pulling back from EVs, and EV... The prices of used EVs are plummeting. And they look at this, and i- in addition, what has popped up? Generative AI. And so, uh, the, the key to strategy is... Strategy is decisions that attempt to cut a swath between market dynamics and your internal competencies, in order to add shareholder value. And the key to strategy is not what you say yes to, but what you say no to. And even Apple has finite resources, both human and capital, and my guess is they've said, "Based on this market, which quite frankly looks increasingly difficult, we would rather take our finite resources-"