Apple talks with Mercedes detailed in new Apple Car report
As you may be familiar with by now, Apple has officially canceled its project to build an electric car. The project never saw the light of day and wasn’t even confirmed by Apple, but the company had been working on its own car since 2014. Following reports that Apple had approached Tesla for a partnership, we now know that the company has also talked to Mercedes-Benz about building an Apple Car together.
Apple tried to build an Apple Car with Mercedes-Benz
As reported by Bloomberg on Wednesday, Apple tried to negotiate a partnership with Mercedes-Benz to build an Apple Car. The report says that talks “progressed further” for months and both companies had been actively working on an electric car project together. However, while Mercedes would build the Apple Car, it also wanted to sell its own cars using Apple’s self-driving platform.
Apple eventually withdrew from the partnership as the company’s executives were confident that Apple could build a car on their own after all the early work with Mercedes. The company also reportedly discussed with Ford the possibility of the car manufacturer selling an Apple Car under its Lincoln brand, but the talks “didn’t progress past an early meeting.”
In the past, Apple had some discussions with Elon Musk about buying Tesla to build its car. However, Apple CEO Tim Cook reportedly pulled the plug on the deal during early negotiations. At some point, Apple executives met with Musk again to discuss other ways of collaborating, such as buying batteries from Tesla.
Interestingly, Bloomberg says that Apple came close to a deal to buy luxury automaker McLaren. At the time, Jony Ive was still working for the company and would get a new design studio in London to work on the project. The deal didn’t go ahead either.
The idea of an Apple Car came from Steve Jobs
Although the Titan project (the codename for the Apple Car) emerged in 2014, the idea came from Apple co-founder Steve Jobs years ago. “In the wake of the 2008 financial crisis, with American car companies on the brink of failure, the Apple chief executive even floated the idea of acquiring General Motors Co. for pennies on the dollar,” the report says.
Tony Fadell, considered the father of the iPod, confirmed that he and Jobs talked about “what would be this generation’s new Volkswagen Beetle.” However, as the company focused on making the iPhone a hit, Jobs decided it wasn’t time to start a car project.
An ambitious project
Under Cook’s direction, the Titan project was quite ambitious. One of the prototypes looked like a white minivan with “rounded sides, an all-glass roof, sliding doors and whitewall tires.” The vehicle would have a giant screen, a powerful audio system, and reclining seats that made the cabin look like a club.
The Apple Car was first designed to have a Level 5 autonomous driving system, meaning that it would drive itself entirely using its onboard computer with no steering wheel or pedals. The only manual controls would be a “video-game-style controller or iPhone app” which would serve as a backup.
Doug Field, head of the project, warned executives about the challenges of building an autonomous car and suggested scaling back the goals to Level 3, which requires a human driver to take control in some situations. However, Apple executives still wanted a Level 5 car.
Frustrations over the car’s project
The project hadn’t made much progress by 2016 and the board of directors was already questioning the viability of the Apple Car. Dan Riccio then convinced Bob Mansfield, known for his role in Apple’s hardware team, to join the car team. Mansfield focused on working on the autonomous driving system rather than the car itself.
Some executives believed that Apple could license its technologies to other car manufacturers. Mansfield and Cook agreed to build a self-driving shuttle in partnership with Volkswagen to be used by Apple employees on its campus. However, the project was seen as a distraction and was also shut down.
The report says that many Apple executives have been frustrated by Cook’s indecision over the direction of the Titan project. In the meantime, as the project was going nowhere, engineers hired to work on the car were leaving Apple to work for other companies. From 2016 to 2018, Apple had already laid off 120 people from the car project.
Sources told Bloomberg that Apple has estimated the production cost of its car at around $120,000, far above the target of $85,000.
The end of the Apple Car
Apple has made a lot of changes to the leadership of the Titan project since then, but none of them have resulted in anything promising. At one point, Apple put a fleet of Lexus SUVs customized with its own self-driving technology on the streets for testing purposes. The plan was to expand these tests to more cities by 2024. The company wanted to sell self-driving as a subscription service.
Last year, before giving up on the project for good, the designers and engineers decided to experiment with a Level 2 autonomous car – the same as the Tesla Autopilot. But that would make the Apple Car look like any other electric car already available on the market without much of a difference.
Kevin Lynch is said to have convinced Apple’s leadership that building a fully autonomous car would take at least another decade. Earlier this year, Cook was already considering shutting down the project as key engineers and executives were already joining other companies.
On February 26, around 2,000 Apple employees received an email about a meeting the following day. Lynch and Williams then confirmed that the Titan project was being shut down without further explanation. Some of the engineers have been relocated to Apple’s AI and software division.
The failed car project cost Apple around $1 billion a year. Be sure to read the full article with even more details about the Apple Car project.
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EV sales kept up their momentum in December 2024, with incentives playing a big role, according to the latest Cox Automotive’s Kelley Blue Book report.
December’s strong EV sales saw an average transaction price (ATP) of $55,544, which helped push the industry-wide ATP higher, according to Kelley Blue Book. The December ATP for an EV was higher year-over-year by 0.8%, slightly below the industry average, and higher month-over-month by 1.1%. Tesla ATPs were higher year-over-year by 10.5%.
Incentives for EVs remained elevated in December, although they were slightly lower month-over-month at 14.3% of ATP, down from 14.7% in November.
EV incentives were higher by an impressive 41% year-over-year and have been above 12% of ATP for six consecutive months. Strong sales incentives, which averaged more than $6,700 per sale in 2024, were one reason EV sales surpassed 1.3 million units last year, according to Cox Automotive, a new record for volume and share.
(My colleague Jameson Dow reported yesterday, “In 2024, the world sold 3.5 million more EVs than it did in the previous year … This increase is larger than the 3.2 million increase in EV sales from the previous year – meaning that EV sales aren’t just up, but that the rate of growth is itself increasing.”)
Kelley Blue Book estimated that in December, approximately 84,000 vehicles – or 5.6% of total sales – transacted at prices higher than $80,000 – the highest volume ever. KBB lumps gas cars and EVs together into this luxury vehicle category, so this is where Tesla Cybertruck is slotted.
However, Tesla bundles sales figures of Cybertruck with Model S, Model X, and Tesla Semi(!) into a category it calls “other models,” so we don’t know for sure exactly how many Cybertrucks Tesla sold in Q4, much less in December. However, Electrek‘s Fred Lambert estimates between 9,000 and 12,000 Cybertrucks were sold in Q4, and that’s not a stellar sales figure.
What will January bring when it comes to EV ATPs? What about tax credits? Check back in a month and I’ll fill you in.
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Tesla is now claiming that Cybertruck was the ‘best-selling electric pickup in US’ last year despite not even reporting the number of deliveries.
There’s a lot of context needed here.
As we often highlighted, Tesla is sadly one of, if not the most, opaque automakers regarding sales reports.
Tesla doesn’t break down sales per model or even region.
For comparison, here’s Ford’s Q4 2024 sales report compared to Tesla’s:
You could argue that Tesla has fewer models than Ford, and that’s true, but Tesla’s report literally has two lines despite having six different models.
There’s no reason not to offer a complete breakdown like all other automakers other than trying to make it hard to verify the health of each vehicle program.
This has been the case with the Cybertruck. Tesla is bundling its Cybertruck deliveries with Model S, Model X, and Tesla Semi deliveries.
Despite this lack of disclosure, Tesla has been able to claim that the Cybertruck has become “the best-selling electric pickup truck” in the US in 2024:
It very well might be true. Ford disclosed 33,510 F-150 Lightning truck deliveries in the US in 2024 while most estimates are putting Cybertruck deliveries at around 40,000 units.
Those are global deliveries, but Tesla only delivered the Cybertruck in the US, Canada, and Mexico in 2024, and most of the deliveries are believed to be in the US.
However, there’s essential context needed here, as we highlighted in our recent ‘Tesla Cybertruck sales are disastrous‘ article.
First off, Tesla had a backlog of over 1 million reservations for the Cybertruck that it has been building since 2019. This led many to believe Tesla already had years of demand baked in for the truck and that production would be the constraint.
However, based on estimates, again, because Tesla refuses to disclose the data, Cybertruck deliveries were either flat or down in Q4 versus Q3 despite Tesla introducing cheaper versions of the vehicle and ramping up production.
Again, that’s after just about 40,000 deliveries.
Furthermore, with almost 11,000 deliveries in Q4 in the US, Ford more likely than not outsold Cybertruck with the F-150 Lightning in Q4.
Electrek’s Take
Tesla is in damage control here. There’s no doubt that it is having issues selling the Cybertruck.
Inventory is full of Cybertrucks and Tesla is now discounting them and offering free lifetime Supercharging.
Tesla is great at ramping up production, and it’s clear the Cybertruck is not production-constrained anymore. It is demand-constrained despite having over 1 million reservations.
Again, those reservations were made before Tesla unveiled the production version, which happened to have less range and cost significantly more.
The upcoming cheaper single motor version should help with demand, but I have serious doubts Tesla can ramp this program up to more than 100,000 units in the US.
As a reminder, Tesla installed a production capacity of 250,000 units annually and Musk said he could see Tesla selling 500,000 Cybertrucks per year.
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