According to a Bloomberg report, Apple is winding down efforts to build its own electric cars, after a decade long speculation of the secretive project which employed “thousands of people”.

Li Xiang, CEO of EV maker Li Auto, quickly made a comment on his Weibo (China’s popular microblogging site) account, saying that Apple was ‘absolutely right strategic choice’. Here is the English translation of his full post:

Apple’s decision to give up on car manufacturing and focus on artificial intelligence is absolutely the right strategic choice, and the timing is appropriate.

  • First, if Apple succeeds in consumer AI, it could become a $10 trillion company; if AI fails, Apple would still be a $1 trillion company. Artificial intelligence will become the top entry point for all devices, services, applications, and transactions, making it a battle Apple must engage in.
  • Second, achieving success in the automotive industry could add $2 trillion to Apple’s market value, but the prerequisite for automotive success is still artificial intelligence. The electrification of cars represents the first half of the game, while AI is the final match.

The AI extended from smartphones is digital (bits), while the AI in cars is physical (atoms), spanning both the digital and physical worlds. The three necessary conditions for success in AI are talent, data, and computing power.

Li Auto’s share price  rose more than 30% during the two trading days, after the company reported the latest earnings (Q4 and FY 2023). It seems that the company is gaining an upper hand in the war of attribution against scores of competitors in China’s tight EV race.

Lei Jun, Founder of Xiaomi who has launched their own EV project, on the other hand, expressed his shock about Apple’s abandonment:

Seeing this news was very shocking! Xiaomi’s strategy is the “entire ecosystem of people, cars, and homes.” We are fully aware of the difficulties in car manufacturing, yet three years ago, we still made an unwavering strategic choice to sincerely build a good car for Mi fans!


Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].