Exclusive: Apple is targeting car production by 2024 and looking at next-level battery technology – sources

(Reuters) – Apple Inc is moving forward with self-driving car technology and is aiming for 2024 to produce a passenger car that could include its own breakthrough battery technology, people familiar with the matter told Reuters.

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

Since then, Apple has made enough progress to build a consumer vehicle now, said two people familiar with the effort, who asked 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 Inc’s Waymo, which built robotic taxis to carry passengers for a self-driving service.

Central to Apple’s strategy is a new battery design that could “radically” reduce the cost of batteries and increase the car’s range, said a third person who saw Apple’s battery design.

Apple declined to comment on its plans or future products.

Making a car is a challenge for the supply chain even for Apple, a big bag company that makes hundreds of millions of electronics products every year using parts from all over the world, but has never made a car. It took Elon Musk’s Tesla 17 years to finally become a sustainable, profitable car.

“If there is one company on the planet that has the resources to do that, it is probably Apple. But at the same time, it’s not a cell phone, ”said a person who worked on Project Titan.

It remains unclear who would assemble an Apple-branded car, but sources have said they expect the company to depend on a manufacturing partner to build vehicles. And there is still a chance that Apple will decide to limit the scope of its efforts to an autonomous driving system that would integrate with a car made by a traditional automaker, rather than the iPhone maker selling an Apple-branded car. , one of the people added.

Two people with knowledge of Apple’s plans warned that pandemic-related delays could extend the start of production to 2025 or beyond.

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

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

Apple’s car may have multiple lidar sensors for scanning different distances, another person said. Some of the sensors could be derived from Apple’s internally developed lidar units, that person said. Apple’s iPhone 12 Pro and iPad Pro models released this year both feature lidar sensors.

Reuters had previously reported that Apple had been in talks with potential lidar suppliers, but it was also looking into building its own sensor.

As for the car’s battery, Apple plans to use a unique ‘monocell’ design that accumulates the individual cells in the battery and frees up space in the battery pack by eliminating pouches and modules that contain battery material, one said. of the people.

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

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

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

To make a profit, car contract manufacturers often ask for volumes that can pose a challenge even to Apple, which would be a newcomer to the auto market.

“To have a viable assembly plant, you need 100,000 vehicles a year and there is more volume to come,” said the person.

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

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

Hal Eddins, chief economist at Apple shareholder Capital Investment Counsel, said Apple has a history of higher margins than most automakers.

“My first reaction as a shareholder is, huh?” Eddins said. “Still don’t really see the appeal of the auto industry, but Apple may be looking at a different angle than I see.”