Apple Targets Electric-Car Shipping Date for 2019

Sep 23, 2015

Consumer-electronics maker accelerates efforts to build Apple-branded car

Apple Inc. is accelerating efforts to build an electric car, designating it internally as a “committed project” and setting a target ship date for 2019, according to people familiar with the matter.

The go-ahead came after the company spent more than a year investigating the feasibility of an Apple-branded car, including meetings with two groups of government officials in California. Leaders of the project, code-named Titan , have been given permission to triple the 600-person team, the people familiar with the matter said.

Apple has hired experts in driverless cars, but the people familiar with Apple’s plans said the Cupertino, Calif., company doesn’t currently plan to make its first electric vehicle fully autonomous. That capability is part of the product’s long-term plans, the people familiar with the matter said.

Apple’s commitment is a sign that the company sees an opportunity to become a player in the automotive industry by applying expertise that it has honed in developing iPhones—in areas such as batteries, sensors and hardware-software integration—to the next generation of cars.

An Apple spokesman declined to comment.

There are many unanswered questions about Apple’s automotive foray. It isn’t clear whether Apple has a manufacturing partner to become the car equivalent of Hon Hai Precision Industry Co., the Taiwanese contract manufacturer that builds most iPhones and is known by the trade name Foxconn. Most major auto makers build and run their own factories, but that hasn’t been Apple’s strategy with iPhones or iPads. Contract manufacturing in the auto industry usually is limited to a few niche models.

The 2019 target is ambitious. Building a car is a complex endeavor, even more so for a company without any experience. Once Apple completes its designs and prototypes, a vehicle would still need to undergo a litany of tests before it could clear regulatory hurdles.

In Apple’s parlance, a “ship date” doesn’t necessarily mean the date that customers receive a new product; it can also mean the date that engineers sign off on the product’s main features.

It isn’t uncommon for a project of this size and complexity to miss ship-date deadlines. People familiar with the project said there is skepticism within the team that the 2019 target is achievable.

The global market for electric cars has been weak because of low gas prices and concerns about vehicle price and battery range. To date, Tesla Motors Inc. and Nissan Motor Co. sell two of the best-known and highest-volume battery-powered vehicles, but volumes are only a sliver of the industry’s 85 million annual vehicle sales.

Emissions standards are tightening around the world, however, leading most major car companies to invest billions of dollars in plans to launch electric cars between now and the end of the decade. By the time an Apple car would make its debut, brands spanning General Motors Co.’s Chevrolet to Volkswagen AG’s Audi and Porsche will have long-range electric vehicles aimed at the mass market.

Earlier this year, The Wall Street Journal reported that Apple had several hundred people investigating an electric vehicle with an initial design resembling a minivan.

Apple has ramped up hiring since then, pulling in veterans from the auto industry as well as battery and machine-vision experts. People inside Apple said employees from across the company have been reassigned to Titan, similar to how Apple assembled a team for the Apple Watch.

Those involved include DJ Novotney, an Apple veteran with a history of successfully shipping products. Mr. Novotney, one of the first hires to the program last year, is a vice president of program management, overseeing a growing team of managers who coordinate activities among various teams. He didn’t respond to a request for comment.

Asked last week by late-night talk-show host Stephen Colbert about Apple’s interest in a driverless car, Apple Chief Executive Tim Cook said: “We look at a number of things along the way, and we decide to really put our energies in a few of them.”

 

Gene Munster, an equity analyst with Piper Jaffray, in a Sept. 1 research note estimated Apple’s chances of making a car at between 50% and 60%. He said he expects any Apple car to have three distinctive features: a unique design; the ability to work with other Apple devices; and some autonomous capability.

As Apple pushes forward, the company is finding it difficult to keep its automobile interest under wraps.

In May, Apple employees met with officials from GoMentum Station, a 5,000-acre former Navy weapons station east of San Francisco that is now a secure testing facility for autonomous and connected vehicles. In emails obtained by The Wall Street Journal through a public-records request, Apple expressed interest in scheduling time at the facility.

Then in August, an Apple lawyer met with officials from California’s Department of Motor Vehicles. In an email, the DMV said the meeting with Apple focused on “the autonomous-vehicle testing regulations that went into effect in September of 2014.”

Both meetings were earlier reported by the Guardian.

Updated profiles of recent Apple hires on LinkedIn, the professional social network, provide other hints. They include, for example, an engineer who specializes in automobile chassis.
Source: wsj.com