On February 28th, Beijing time, well-known Apple journalist Mark Gurman broke the explosive news on Tuesday that Apple would abandon its ten-year-old electric car project. US media pointed out that the sudden end of Apple's electric car plan is a bleak sign for the auto market, but it is a boon for other automakers.
Apple is a giant in the electronics industry. Its withdrawal will be a relief to Tesla and traditional Detroit automakers. Because the growth of the US electric vehicle market itself is already slowing down, Apple's withdrawal will eliminate a threat to them and provide a new opportunity for them. The market provides a large pool of engineers and other talents who may be unemployed as a result.
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Over the past year, Tesla has lowered the prices of its cars and warned of falling demand.Established automakers such as General Motors and Ford Motor Co. have delayed investment in electric vehicles and canceled production plans. Now, in a competitive and uncertain market, they have one less competitor to worry about, especially a technology company with $61 billion in cash to squander.
“They're probably relieved,” said Mike Ramsey, an analyst at well-known research firm Gartner. “Apple scared some people when it first entered this market.”
U.S. electric car market slumps
Apple's exit before the U.S. electric car market had even really taken off underscores how tough the business has become. Electric vehicles are still too expensive for most consumers, and the U.S. charging system is imperfect. According to Bloomberg Industry Research, U.S. electric vehicle sales are expected to grow by only 9% this year, compared with a compound annual growth rate of 65% over the past three years. This means that existing manufacturers can only compete for about 10% of new buyers in the US market.
U.S. electric vehicle startups are already struggling due to sluggish sales and severe cash burn. Rivian Automotive forecast production this year to be the same as last year and said it would cut jobs, sending the company's stock price down the most in history. Lucid Group will produce only 9,000 cars this year, worsening its already weak financial footing.
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Car rental giant Hertz Global Holdings announced last month that it plans to sell off 20,000 electric vehicles, or a third of its U.S. electric vehicle fleet, due to weak demand, rapid value depreciation and high repair costs. The move marks a reversal from Hertz, which initially was actively purchasing electric vehicles from Tesla and other automakers.
Meanwhile, General Motors is struggling to make electric vehicles as it encounters production problems, and Ford is seeing a drop in demand and reining in investment plans.General Motors has delayed plans to open an electric pickup truck factory near Detroit. Germany's Mercedes-Benz has abandoned plans to sell only electric cars by 2030.
Tesla benefits the most
Jeff Schuster, global vice president of automotive research at consulting firm GlobalData, said that the technology industry has underestimated the difficulty of subverting the automotive industry, and Apple's exit has become another example.
“The technology industry has a big vision and a low hand. They think that cars are old antiques and they can come in and develop them. It's easy. What's so hard about it? They've made mobile phones and have mastered all the technology. They can handle it,” Schuster said in an interview. , “But nine times out of ten most people will find that it’s actually more challenging, more difficult to navigate, more complex than they thought.”
Tesla may benefit the most from Apple's exit. Gartner analyst Ramsey said that after cutting car prices by at least 25% for a year, the last thing Musk wants to see is the emergence of a competitor with the same high-tech appeal in Silicon Valley.
“Apple's launch of electric cars is undoubtedly the most detrimental to Tesla,”He said, “Tesla cars are regarded as status symbols by people, which has benefited the company a lot. And Apple electric cars are definitely a tool to express their status.”
Tesla CEO Elon Musk celebrated Apple's decision to give up developing electric cars in a post on X with a salute emoji and a cigarette on it on Tuesday.
Robbing for talents
Brad Holden, founder of executive search firm Holden Richardson, noted that automakers will now also look to grab some of the talent lost when Apple canceled its electric car project.
“There will be a lot of good talent on the street, so they will be snatched away by other companies,” Horton said.