‘Make Or Break Point’: Apple Delays Car Launch To 2028, Dials Back Self-Driving Features

Good morning! It’s Wednesday, January 24, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.

Apple Is Still Trying to Make Your Phone Into Your Car Key

1st Gear: Apple Car May Be Rotten

Apple has been in the process of building a car for just about 10 years at this point, and it has now apparently pivoted to a “less ambitious” design in order to finally get the electric vehicle out the door. At one point, Apple envisioned a completely driverless car, but that’s just not going to happen, is it? Now, it’s going to be more of a regular EV.

Even with this change, Apple’s original release date has gone by the wayside. Now, it looks like Apple will introduce the car in 2028 at the earliest, nearly two years after a recent projection, according to anonymous sources. From Bloomberg:

Apple’s secretive effort to create a car is one of the most ambitious endeavors in its history, and one of its more tumultuous. Since it began taking shape in 2014, the project — codenamed Titan and T172 — has seen several bosses come and go. There have been multiple rounds of layoffs, key changes in strategy and numerous delays.

But it remains one of the company’s potential next big things — an entirely new category for the device maker that could help reinvigorate sales growth. Apple’s revenue stalled last year as it contended with a maturing smartphone industry and a slowdown in China, its biggest overseas market.

But Apple has struggled with how to approach such a product. As of the end of 2022, the Cupertino, California-based company aimed to release a car by 2026 with advanced self-driving features for highways.

Now, after finding it wouldn’t be able to complete such a vehicle in the foreseeable future, Apple is developing more basic driver-assistance features in line with current Tesla Inc. capabilities, according to the people with knowledge of the plans. The car will use what is known as a Level 2+ system, the people said. That’s a downgrade from previously planned Level 4 technology — and, before that, even more ambitious aims for a Level 5 system.

This shift has been seen as a pivotal moment for Apple’s car internally. Bloomberg says that either the company is finally able to deliver the car with reduced expectations or top execs at Apple may scrap the plan altogether. However, there’s apparently a third route where Apple changes direction again and takes a new track with the car.

The prior design for the vehicle called for a system that wouldn’t require human intervention on highways in approved parts of North America and could operate under most conditions. The more basic Level 2+ plan would require drivers to pay attention to the road and take over at any time — similar to the current standard Autopilot feature on Tesla’s EVs.

The company has been meeting with potential manufacturing partners in Europe to discuss the new approach. After the initial car debuts, Apple hopes to release an upgraded system later that supports Level 4 autonomy and additional regions. In that scenario, the vehicle operates totally on its own but still only in certain conditions. Level 5 means the car can drive itself anywhere under any circumstances.

The new strategy was adopted after a series of frenzied meetings that included Apple’s board, project head Kevin Lynch and Chief Executive Officer Tim Cook. The board had pressed Apple leadership about the car plan for several months during 2023, according to the people.

This goddamn car has been one of Apple’s most expensive research and development projects for pretty much an entire decade. Apple has reportedly spent hundreds of millions of dollars on salaries, cloud-based systems for controlling self-driving computers, closed road testing and engineering.

Apple has spent years working on powertrains, self-driving hardware and software, car interiors and exteriors, and other key components. And yet, the vehicle has never successfully reached a formal prototype stage. Company managers are hoping that could finally happen with the new approach, according to the people.

Uncertainty has plagued the endeavor for years. When former project head Doug Field left in 2021, it was in part because he didn’t believe top executives would ever formally approve the release of a vehicle. Before Apple, Field ran engineering at Tesla. He now oversees Ford Motor Co.’s EV efforts.

Even with the new plan, some Apple executives are skeptical that a vehicle could ever provide the kind of profit margins that the company enjoys on iPhones. Still, a car in the $100,000 range would fuel revenue and help Apple plant a flag in the growing EV sector.

So, will the Apple Car ever actually be released? I don’t know. If it is, I will be very old and decrepit (probably in my mid-30s). That being said, I probably would not bet against Apple.

2nd Gear: Southwest Flight Attendants Prepare To Strike

Southwest Airlines flight attendants voted to authorize a strike against the airline on January 23, according to their union. The move came after members rejected a tentative agreement with Southwest in December of 2023.

TWU Local 556, which reps over 21,000 Southwest flight attendants, said 98 percent of its voting members approved the strike, and it was the first such vote in the union’s history. From the Wall Street Journal:

In December, about 64% of members rejected a tentative five-year contract, leading the union back to the negotiating table with the airline.

The previous collective-bargaining agreement with the flight attendants’ union became amendable in November 2018.

The union is calling for scheduling for on-call rotations, appropriate compensation for ground time and improved commuter policies in the new contract.

Following the authorization, if Southwest and the union don’t reach a deal in federal mediation, the union would be free to call a strike.

The vote came after Southwest Airlines pilots approved a new contract on January 22, and while all that is happening, Southwest is still negotiating with two union-represented working groups over collective-bargaining agreements. It’s a busy time for the rights of workers.

3rd Gear: Kia Recalls 101,409 Vehicles

Kia is recalling 101,409 vehicles because of issues with the roof molding. Turns out, it can end up loosening and detaching, which isn’t a quality most people want in their roof moldings. From Automotive News:

The recall includes certain 2023-24 Sportage and 2022-24 Carnival vehicles whose roof molding could be defective. A detached roof mold could create a road hazard for other vehicles, increasingly the likelihood of a crash, NHTSA said.

No crashes or injuries were reported at the time of the announcement as a result of the defect.

Dealers will inspect the roof molding and replace or secure it if necessary for free. Owner notification letters are expected to go out March 15.

By my count, this is one of the first big recalls of 2024. It was about time. I was getting bored with all this automotive build quality.

4th Gear: Tire-Changing Robot Startup Goes Belly Up

A startup that was attempting to automate the process of changing car tires that was backed by Discount Tire is liquidating in a Chapter 7 bankruptcy. RIP RoboTire Inc. We hardly knew you. From Automotive News:

RoboTire Inc. filed for protection in U.S. Bankruptcy Court in Delaware on Friday amid financial troubles, carrying $12.7 million in liabilities, according to a court document.

The company, whose founder and CEO is Victor Darolfi, listed $12.3 million in assets — the most valuable being a book of patents, copyrights, trademarks and trade secrets valued at $8 million.

That intellectual property is subject to a lien by Reinalt-Thomas Corp., doing business as Discount Tire. The Scottsdale, Ariz.-based tire retail giant, which was founded in Ann Arbor in 1960, has a $1.6 million secured claim against the value of the debtor’s intellectual property. The retailer is also the startup’s largest unsecured creditor, with a separate $3.3 million claim.

[…]

RoboTire, launched in suburban Detroit in 2018, designed technology to automate tire-changing using a robotic arm, claiming it could dramatically reduce the time it takes to complete a job. The startup landed a $7.5 million Series A financing round in 2021.

In addition to Discount Tire, participants in that round included Detroit Venture Partners, the venture capital firm founded by billionaire Dan Gilbert. The VC firm was just a small equity investor and is not listed as a major creditor in the bankruptcy case.

RoboTire had several of its systems in Arizona, Pennsylvania and Texas, where it finalized installation of a second system for Discount Tire last February, according to a news release at the time. It also installed a tire changing system at a Detroit Garage location.

Back in December, RoboTire and its CEO was reportedly hit with a lawsuit by a New York-based receivables financing company called American Funding Services. It claimed that it was owed over $130,000 after going into default at the end of October.

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