Apple's electric car crash shows even a $2.8 trillion company can't burn cash forever

Tim Cook is driving Apple into new areas with AI and mixed reality. Justin Sullivan/Getty Images

• Apple just called it quits on its secretive electric vehicle project.
• A new report claimed the company was dropping the project after 10 years.
• It’s little surprise though: Apple has AI and mixed reality to tackle.

The world was quite different when Apple quietly started its electric vehicle project in 2014.

The zero-interest-rate policy (ZIRP) era was in its heyday; the iPhone 6 was fresh enough not to feel incremental to consumers, and the problems of a supply chain wrapped up in China only appeared in glimpses.

That all helped afford Apple the luxury to pursue something behind closed doors far beyond its usual remit of personal gadgets.

A decade on, however, things are looking quite different.

So much so, that a Bloomberg report said Apple was calling it quits on its highly secretive EV push known as Project Titan. Senior executives Jeff Williams and Kevin Lynch reportedly broke news on Tuesday to the near-2,000 people working on the project.

Historically, Apple has had projects in the background that have never made the light of day. For instance, a tablet prototype developed in 1992 called the PenLite never made it to shelves. Neither did the AirPower, a wireless charging mat announced in 2017.

But in canceling a project that would have taken Apple into an entirely new industry, the company is signaling that it’s done with side hobbies. And for good reason.

AI and mixed reality priorities

At an almost $3 trillion market capitalization, and as one of the most cash-rich companies today, it’s easy to think Apple has the resources to continue plowing cash into side projects.

But in 2024, it’s clear that Apple has a lot of other new areas to throw money at.

Having launched its Vision Pro mixed reality headset this month, the company has already committed itself to scaling and commercializing a technology that presents an entirely new business area.

Tim Cook and Apple Vision Pro. Justin Sullivan/Getty Images

The $3,500 goggles are not expected to be an immediate revenue driver. Still, the company will need to devote serious effort toward innovating the headset over the years, amid user complaints about its weight and comfort.

That’s particularly so as competitors like Mark Zuckerberg post public teardowns of Apple’s foray into mixed reality — a technology far from hitting mainstream appeal.

Apple will also be thinking hard about AI.

Following the release of ChatGPT, analysts and Apple watchers wondered when the company would share details about its work on AI as other Big Tech rivals like Meta and Google scrambled to make the technology a priority.

Earlier this month, CEO Tim Cook hinted that Apple would soon unveil its strategy on the technology after mentioning “artificial intelligence” for the first time since ChatGPT’s launch in prepared remarks for an earnings call.

Of course, Apple is likely to have run into the difficulties of building EVs that so many before have encountered. The wheels fell off British billionaire Sir James Dyson’s EV plans in 2019, for example. In an email to staff, he acknowledged that commercial viability was a way off.

AI and mixed reality are plenty to keep it busy for now.