What’s Up Wednesday 6/26/19

Do Recent Moves Signal Apple Is Recommitting to Its Own EV?

The Mountain View (California)-based technology startup, Drive.ai, was just acquired (a last-minute deal) by Apple.  At very least, it’s a way for the tech giant to re-invigorate its stagnant autonomous-vehicles operation (interestingly enough, Uber – in a bid to enhance its own ambitions for self-driving vehicles, recently picked up Seattle-based startup, Mighty AI – and also interesting, the details of these deals are rumored to be largely the same.  These companies – those acquired – will no longer float.  In each case, the original startup will fold instead of being directly absorbed.  Top talent from each AI startup will join the acquiring company.  Other employees of each startup will be without a job by the end of this week.  And it’s safe to assume that founders of these acquired startups won’t be walking away with anything for their time invested.  Outside investors in these startups won’t be receiving their original money back – let alone the extravagant returns that they may have envisioned when – in the case of Drive.ai at least – the company was valued, at its last venture round, at a suave $200 million dollars (at its own last venture round, Mighty AI was valued at a pretty healthy $85 million).

This mercurial startup (Drive.ai) was in business for 4 years, not even the average expectation for a new company (Mighty AI, the Uber acquisition, was in existence for five).  Drive.ai raised $77 million dollars in venture money compared to Mighty AI’s $27 million.  While these acquired companies are not direct competitors, it is interesting that both are in the autonomous vehicle field – a field at the moment wide open (and while analysts may be particularly bullish on one or another of the marketplace’s major contenders, there is no clear-cut advantage for GM, Google, Tesla, or anybody else – and it’s also possible that effective self-driving technology will derive from a company whose name we don’t even know).  Apple had been exploring seriously the development of its own electric automobile since 2014, but transitioned away from this (in 2016) in favor of creating software that contributed to the autonomous-vehicle capabilities of outside manufacturers and vendors.  Then the software giant implied a movement away from the development of self-driving technology, laying off just under 200 workers in the unit (the “Project Titan” unit, created in 2014) in February of this year.

There have been signs that Apple already regrets the 2016 decision to swivel away from autonomous driving.  In addition to this Drive.ai “sort of” acquisition, Apple has brought in people from Waymo and Tesla.  In fact, this may go beyond autonomous driving – it may suggest that, even before the move to acquire Drive.ai, the idea of developing its own EV (or perhaps a different type of vehicle) was never completely off the table.

Ambitions for the creation of an electric vehicle are nothing new to Apple either.  The iPhone has become one of its laundry list of iconic devices – but before the iPhone’s launch, Apple was rumored to be exploring the design and manufacture of its own electric vehicle.  Those ideas are said to have been abandoned in 2008.  Yet in 2010, Steve Jobs was still interested enough in the idea of an Apple vehicle to meet with the manufacturer of the alternative-energy “V-Vehicle” – the startup that manufactured this machine was founded in 2009 by a former Oracle executive (and backed both by oilman, T. Boone Pickens, and the environmentally-conscious venture firm, Kleiner Perkins).  The manufacturer of the V-Vehicle, at some point, passed by the wayside, after pulling in $100 million plus from investors.

For Apple, it’s been a love-hate relationship with the notion of its own EV across the ensuing decade.  In early 2015, somebody from Apple (never identified) revealed to the publication, Business Insider, that the company was engaged in a project that would make it a direct competitor of Tesla (and that Apple was even seeing Tesla talent jump to its ship, motivated by enthusiasm for this project).  Soon after, the Financial Times reported that Apple was bringing in designers and engineers from throughout the automobile industry (a report initially scoffed at but then verified by The Wall Street Journal).

In appearance, Apple’s proposed electric was a cross between a modern SUV and a minivan (for what it’s worth, in pictures it reminds me for some reason of the Land Rover Evoque).  In 2014, The Wall Street Journal claimed that there would be over 1,000 workers dedicated to this special project, green-lighted by Apple head man, Tim Cook.  It’s a project that seems to have lacked a coherent direction, perhaps from the beginning.  What troubles me is that this 1,000-man (or more) project team (apparently) wasted its time evaluating technologies like electric (noiseless) sliding doors, and new interior designs that made allowances for the absence of traditional pedals and steering wheel, and comparing various impressive AI displays – when I was a kid, my siblings and I tried our hands at designing cars – I won’t try selling anybody that ours would rival the likes of Ferrari (or our favorite car, the Rolls Royce), but what I do recall clearly is that most of our attention was focused on the car’s interior – we always knew what kinds of luxury gadgets and buttons and switches should encompass the driver – when it came to the choice of a motor or an exterior design, anything that tended to be complicated, we glossed over it.  It’s difficult to have a useful car if all you’ve designed is its interior – as officious as that interior might be.  Our old man would want to know where the substance of our idea was- over and above the obvious fact that we’d done a great interior.  I’d like to put my old man’s question to the Apple “Project Titan” team – I’d like to know what and where the substance of their vehicle is.  What I’ve never seen anyplace (or heard from anybody at Apple) – going back to the company’s first interest in the development of an electric vehicle is any description of an Apple electric’s range, of its powertrain and/or horsepower, of its equipment or features, of its costs to manufacture and to purchase, of what a dealer-network and support system for the Apple vehicle would look like, or for that matter any sort of specification with any sort of value or relevance pertaining to this as a real (eventual) road-worthy machine.

Does Apple want to design a car?  If yes, does anybody really know what kind of a car the Apple car will be?  Does anybody even know for a certainty that this car – to be manufactured by Apple – will rely on electric power.  It wouldn’t need to be an electric to be autonomous or self-driving.  Rumors have it that a lot of pragmatic questions were ignored or kicked down the road for later evaluation after incessant internal disagreements threatened to stall the project or pose a serious challenge to those involved (sure doesn’t sound like a fun working environment).

Maybe it’s simply a question of leadership.  It’s difficult to see these types of distractions or this disjointedness happening if Steve Jobs himself was in charge.  Had Jobs pursued an EV a decade ago when that possibility was explored, one wonders where we would be – and where Apple would be – and how different Apple would be as a company today.

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