Automakers now have one fewer competitor to worry about in a crowded and uncertain arena
Bloomberg News
The sudden demise of Apple Inc.’s electric-vehicle program is a bleak sign for the car market. It’s also a welcome boon for automakers themselves.
Apple Pulls Plug on Electric Car Plans
Apple Inc. is canceling a decade-long effort to build an electric car, according to people with knowledge of the matter, abandoning one of the most ambitious projects in the history of the company. Mark Gurman reports. Follow Bloomberg for business news & analysis, up-to-the-minute market data, features, profiles and more: https://www.bloomberg.com Connect with us on… Twitter: https://twitter.com/business Facebook: https://www.facebook.com/bloombergbusiness/ Instagram: https://www.instagram.c
Tesla Inc. and Detroit’s automakers can breathe a sigh of relief after the electronics giant scrapped its car program, eliminating a threat in an EV market where growth is slowing and providing a pool of engineers and other talent who may be out of a job.
In the past year, Elon Musk’s company has cut prices and warned of slumping demand, while established carmakers such as General Motors Co. and Ford Motor Co. have delayed investment and pulled back production plans. Now, they have one fewer competitor to worry about in a crowded and uncertain arena, especially a tech company with US$61 billion in cash to throw around.
“They’re probably relieved,” Gartner Inc. analyst Mike Ramsey, said. “Apple getting in the market scared people early on.”
Apple exiting the EV market before it really revved up underscores just how tough the business has become. The cars are still too expensive for most consumers and charging is patchy in the United States and Canada. EV sales are expected to rise just nine per cent this year, after growing at a compounded annual rate of 65 per cent over the past three years, according to a forecast by Bloomberg Intelligence.
That means every company standing will be fighting over about 10 per cent of new buyers in the U.S. market.
EV startups are already struggling amid meagre sales and heavy cash burn. Rivian Automotive Inc. forecast flat production this year and said it would lay off workers, sending its shares to their biggest ever decline. Lucid Group Inc. will only make 9,000 vehicles this year, putting it on weaker financial footing.
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