Apple cancels decade-long electric car project

Apple has canceled work on its electric car, a source familiar with the matter told Reuters on Tuesday, a decade after the iPhone maker kicked off the project.

The move draws the curtain on a plan that would have helped Apple break out into a new industry and potentially replicate the success of the iPhone.

The project had seen uneven progress throughout its life and its end comes as global automakers cut back their investments in electric vehicles, whose demand has dropped significantly.

Several employees working on the project will be shifted to the company’s artificial intelligence (AI) division, according to Bloomberg News, which first reported the development.

Apple declined to comment.

“If it is true, Apple will put more focus on GenAI and that should give investors more optimism about the company’s efforts and ability to compete at a platform level on AI,” said Ben Bajarin, CEO of consulting firm Creative Strategies.

Apple has so far held back from any big moves in AI, in stark contrast to tech giants such as Alphabet and Microsoft, which have first-mover advantage in incorporating the breakthrough technology.

Its quiet approach has sparked worries the iPhone-maker could be behind in integrating the technology into its products.

That was reflected in Apple’s share gain last year, which at nearly 50% was the smallest among the so-called Magnificent Seven stocks.

Last month, Microsoft overtook Apple as the world’s most valuable company as the iPhone maker grapples with weakness in demand for its key products, especially in major market China.

Meanwhile, high interest rates have led to a slowdown in demand for usually pricier electric vehicles, prompting the industry to cut jobs and reduce production.