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 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.
Mike Ramsey contributed to this article
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(END) Dow Jones Newswires
September 21, 2015 14:15 ET (18:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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