Apple could start building self-driving cars from 2024

Apple is pushing self-driving car technology and is targeting production of a passenger car by 2024 that could contain its own groundbreaking battery technology, people familiar with the matter told Reuters.

The iPhone maker’s automotive projects, known as Project Titan, have been uneven since 2014, when it first began creating its own vehicle from scratch. At one point, Apple withdrew its efforts to focus on software and reviewed its goals. Doug Field, an Apple veteran who had worked at Tesla, returned to oversee the project in 2018 and laid off 190 people from the team in 2019.

Since then, Apple has advanced so far that it is now aiming to build a vehicle for consumers, two people familiar with the effort said, asking not to be named because Apple’s plans are not public. Apple’s goal of building a personal vehicle for the mass market contrasts with rivals like Alphabet’s Waymo, which built robo-taxis to carry passengers for a driverless hail service.

At the heart of Apple’s strategy is a new battery design that could “radically” lower the cost of batteries and increase the range of the vehicle, according to a third person who saw Apple’s battery design.

Apple declined to comment on its plans or future products.

Making a vehicle poses a supply chain challenge even for Apple, a deep pocket company that makes hundreds of millions of electronic products with parts from around the world every year but has never made a car. It took 17 years to get there Elon Musk’s Tesla eventually became a sustainably profitable car.

“If there’s one company on the planet that has the resources, it’s likely Apple. At the same time, however, it’s not a cell phone,” said one person who worked on Project Titan.

It remains unclear who would assemble an Apple-branded car, but sources have expected the company to rely on a manufacturing partner to build vehicles. And there’s still the possibility that Apple might decide to cut the scale of its efforts to an autonomous driving system built into a traditional automaker’s car, rather than the iPhone maker selling an Apple-branded car, one of the people added .

Two people who were aware of Apple’s plans warned of delays related to pandemics and could push production start-up until 2025 or beyond.

Tesla’s shares fell 6.5 percent on Monday after debuting in the S&P 500 on Monday. Apple shares rose 1.24 percent after the news.

Apple has decided to enlist outside partners for elements of the system, including lidar sensors that give self-driving cars a three-dimensional view of the road, according to two people familiar with the company’s plans.

Apple’s car could have multiple lidar sensors for scanning at different distances, another person said. Some sensors could be derived from Apple’s in-house developed lidar units, this person said. Apple’s iPhone 12 Pro and iPad Pro models released earlier this year both have lidar sensors.

Reuters had previously reported that Apple had talks with potential lidar suppliers, but was also considering building its own sensor.

For the car’s battery, Apple plans to use a unique “monocell” design that inflates the individual cells in the battery and frees up space in the battery pack by removing the pouches and modules that hold battery materials, according to one respondent.

Apple’s design allows more active material to be packed into the battery, potentially giving the car a longer range. Apple is also exploring a chemistry for the battery called LFP, or lithium iron phosphate, which is inherently less likely to overheat and therefore safer than other types of lithium-ion batteries.

“It’s the next level,” the person said of Apple’s battery technology. “Like the first time you saw the iPhone.”

Apple had previously embroiled Magna International in talks about making a car, but talks ended when Apple’s plans became unclear, said a person familiar with those earlier efforts. Magna did not immediately respond to a request for comment.

To make a profit, automakers often ask for quantities that could pose a challenge even to Apple, which would be a newcomer to the automotive market.

“To have a functioning assembly plant, you need 1,00,000 more volume vehicles annually,” the person said.

Some Apple investors reacted with caution to Reuters’ report on the company’s plans. Trip Miller, managing partner of Apple investor Gullane Capital Partners, said it could be difficult for Apple to produce large quantities of cars out of the gate.

“It seems to me that if Apple develops an advanced operating system or battery technology, it can best be used in partnership with an existing manufacturer under license,” Miller said. “As we see at Tesla and the old automakers, a very complex manufacturing network around the world doesn’t happen overnight.”

Hal Eddins, chief economist with Apple shareholder Capital Investment Counsel, said Apple has historically had higher margins than most automakers.

“My first reaction as a shareholder is what?” Said Eddins. “I still don’t really see the appeal of the auto business, but Apple may have a different perspective than what I see.”

© Thomson Reuters 2020

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