Apple Inc. is canceling a decade of work to create an electric car, according to people with knowledge of the matter, abandoning one of the most ambitious projects in the company’s history.
Apple announced the news Tuesday, surprising nearly 2,000 employees working on the project, said the people, who asked not to be identified because the announcement was not public. The decision was supported by Chief Operating Officer Jeff Williams and Kevin Lynch, the vice president in charge of the project, the people said.
Both executives told employees that the project would begin to wind down and that many members of the team working on the car, known as the Special Projects Group, or SPG, would be transferred to the artificial intelligence division under chief executive John Giannandrea. These employees will focus on generative artificial intelligence projects, which have become an increasingly key priority for the company.
Apple’s automotive team also has several hundred hardware engineers and car designers. It is possible that they will be able to apply for jobs in other Apple teams. There will be layoffs, but exactly how many is still unclear.
Apple, based in Cupertino, California, declined to comment.
The move came as a relief to some investors who trimmed the stock’s decline on Tuesday. Shares rose about 0.5% to $182.01 at 2:18 p.m. in New York after Bloomberg reported the news.
Elon Musk, head of Tesla Inc., also celebrated the move. He sent a post to X with a greeting emoji.
The decision to finally shut down the project was a bombshell for the company, putting an end to a multibillion-dollar effort that could have taken Apple into a completely new industry. The tech giant began working on the car around 2014, aiming for a fully autonomous electric vehicle with a limousine-like interior and voice-activated navigation.
But almost from the very beginning, the project experienced difficulties: Apple changed the leadership and strategy of the team several times. Lynch and Williams took over the company several years ago after the departure of Doug Field, now a senior executive at Ford Motor Co.
The decision to scrap the project was made by Apple’s senior management in recent weeks, the people said. This comes just a month after Bloomberg News reported that the project had reached or crucial moment. The most recent approach discussed internally was delaying the car’s release until 2028 and reducing self-driving performance from Level 4 to Level 2+.
Most recently, Apple expected the car to cost around $100,000. But executives were concerned that the car would be able to generate the kind of profit margin that Apple typically makes on its products. The company’s board of directors was also concerned that it was continuing to spend hundreds of millions of dollars a year on a project that might never see the light of day.
Apple continues to invest heavily in other areas. Over the past five years, the company has spent $113 billion on research and development, with a compound annual growth rate of about 16%. The company also recently launched the Vision Pro headset—its first new product category in nearly a decade—and has grown that business.