Technology

Apple targets car production by 2024 and eyes ‘next level’ battery technology


Central to Apple’s strategy is a new battery design that could “radically” reduce the cost of batteries and increase the vehicle’s range

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Apple Inc is moving forward withself-driving car technology and is targeting 2024 to produce apassenger vehicle that could include its own breakthroughbattery technology, people familiar with the matter toldReuters.

The iPhone maker’s automotive efforts, known as ProjectTitan, have proceeded unevenly since 2014 when it first startedto design its own vehicle from scratch. At one point, Apple drewback the effort to focus on software and reassessed its goals.Doug Field, an Apple veteran who had worked at Tesla Inc, returned to oversee the project in 2018 and laid off190 people from the team in 2019.

Since then, Apple has progressed enough that it now aims tobuild a vehicle for consumers, two people familiar with theeffort said, asking not to be named because Apple’s plans arenot public. Apple’s goal of building a personal vehicle for themass market contrasts with rivals such as Alphabet Inc’sWaymo, which has built robo-taxis to carry passengersfor a driverless ride-hailing service.

Central to Apple’s strategy is a new battery design thatcould “radically” reduce the cost of batteries and increase thevehicle’s range, according to a third person who has seenApple’s battery design.

Apple declined to comment on its plans or future products.

Making a vehicle represents a supply chain challenge evenfor Apple, a company with deep pockets that makes hundreds ofmillions of electronics products each year with parts fromaround the world, but has never made a car. It took Elon Musk’sTesla 17 years before it finally turned a sustained profitmaking cars.

“If there is one company on the planet that has theresources to do that, it’s probably Apple. But at the same time,it’s not a cellphone,” said a person who worked on ProjectTitan.

It remains unclear who would assemble an Apple-branded car,but sources have said they expect the company to rely on amanufacturing partner to build vehicles. And there is still achance Apple will decide to reduce the scope of its efforts toan autonomous driving system that would be integrated with a carmade by a traditional automaker, rather than the iPhone makerselling an Apple-branded car, one of the people added.

Two people with knowledge of Apple’s plans warnedpandemic-related delays could push the start of production into2025 or beyond.

Shares of Tesla ended 6.5% lower on Monday after their debutin the S&P 500 on Monday. Apple shares ended 1.24%higher after the news.

Apple has decided to tap outside partners for elements ofthe system, including lidar sensors, which help self-drivingcars get a three-dimensional view of the road, two peoplefamiliar with the company’s plans said.

Apple’s car might feature multiple lidar sensors forscanning different distances, another person said. Some sensorscould be derived from Apple’s internally developed lidar units,that person said. Apple’s iPhone 12 Pro and iPad Pro modelsreleased this year both feature lidar sensors.

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Reuters had previously reported that Apple had held talkswith potential lidar suppliers, but it was also examiningbuilding its own sensor.

As for the car’s battery, Apple plans to use a unique”monocell” design that bulks up the individual cells in thebattery and frees up space inside the battery pack byeliminating pouches and modules that hold battery materials, oneof the people said.

Apple’s design means that more active material can be packedinside the battery, giving the car a potentially longer range.Apple is also examining a chemistry for the battery called LFP,or lithium iron phosphate, the person said, which is inherentlyless likely to overheat and is thus safer than other types oflithium-ion batteries.

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

Apple had previously engaged Magna International Incin talks about manufacturing a car, but the talks petered out asApple’s plans became unclear, a person familiar with thoseprevious efforts said. Magna did not immediately respond to arequest for comment.

To turn a profit, automotive contract manufacturers oftenask for volumes that could pose a challenge even to Apple, whichwould be a newcomer to the automotive market.

“In order to have a viable assembly plant, you need 100,000vehicles annually, with more volume to come,” the person said.

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

“It would seem to me that if Apple develops some advancedoperating system or battery technology, it would be bestutilized in a partnership with an existing manufacturer underlicense,” Miller said. “As we see with Tesla and the legacy autocompanies, having a very complex manufacturing network aroundthe globe doesn’t happen overnight.”

Hal Eddins, chief economist at Apple shareholder CapitalInvestment Counsel, said Apple has a history of higher marginsthan most automakers.

“My initial reaction as a shareholder is, huh?” Eddins said.”Still don’t really see the appeal of the car business, but Apple may be eyeing another angle than what I’m seeing.”

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