Insider Today: Apple pulls the plug on EVs

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February 28, 2024 • 5 min read

with Dan DeFrancesco

Hi! Be prepared to start scheduling your trips to Wendy’s during off hours if you want to save money. The fast-food joint is rolling out surge pricing as early as next year. (More on why it could be a win for customers below.)

Meanwhile, Donald Trump remains the frontrunner for the Republican presidential nomination, following a win over Nikki Haley in the Michigan primary.

In today’s big story, we’re looking at Apple scrapping its plans for an electric car after a decade of work. 

What’s on deck

But first, 10 years of EV work down the drain.

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Grafissimo/Getty, Apple, Tyler Le/BI

The big story

Fallen Apple

Apple is calling it quits on its electric-vehicle ambitions after a decade of work.

The tech giant blindsided the nearly 2,000 employees on its EV team with the news, Business Insider’s Aaron Mok writes. Many workers will transfer to Apple’s artificial intelligence division to work on generative AI projects. 

There will reportedly be an opportunity for hardware engineers and car designers to apply for open roles at Apple, but layoffs are also in the cards.

The ending is abrupt, but Apple’s EV ambitions weren’t easily realized. 

The project had multiple changes in leadership and strategy since it launched in 2014, according to Bloomberg, which first broke the news. The most recent goal for launching an EV was 2028. 

Never one to miss a chance to chime in, Tesla CEO Elon Musk quoted a tweet about the news on X with a salute and cigarette emojis. (I’m all ears for your interpretations.) 

NurPhoto/Getty, Tyler Le/BI

Apple’s departure shows how challenging the once red-hot EV market has become. 

EV demand has slowed considerably, forcing manufacturers to cut costs and rethink plans. That’s been evident in two of the biggest players in the space this year.

Rivian recently cut 10% of staff, and its CEO evaded a question about whether it had enough money to build its next vehicle. Tesla’s Q4 earnings disappointed as Chinese automakers pose a serious threat to Musk’s company, which has seen its stock plummet this year. 

So, while Apple invested plenty of resources into the space, it’s better to get out now than slip into the sunk-cost fallacy. 

Besides, Apple has no shortage of other issues to deal with. Tensions are sky-high between its two biggest markets (US and China), and it’s less than a month removed from its biggest product launch in eight years (Vision Pro). And then there’s that whole AI race. 

Investors seemed to agree with the move, at least initially, as Apple’s stock surged as much as 2% in the immediate aftermath of the news.

In the long run, Apple’s exit could even be spun as a win for the EV market. 

Less competition is rarely good, but some of Apple’s employees could land at rival EV makers, providing a much-needed boost. For others, a departure from Apple might be a launching pad for their endeavors in the space.

3 things in

Markets

🔔 Before the opening bell: US stock futures fall early Wednesday as investors await Thursday's personal consumption expenditure reading.

Spencer Platt/Getty Images

1. What’s driving stocks higher might be slowing down. (And no, it’s not AI.) Corporate profit margins might have peaked, and that’s bad news for stocks, according to JPMorgan equity strategist Mislav Matejka. Interest rates and inflation are starting to catch up with companies. 

2. The economy needs to brace for impact, according to Morgan Stanley’s top US economist. Ellen Zentner said a hard landing is guaranteed, as high rates and geopolitical risks remain prevalent. “We are in the camp that we haven't seen all of the tightening impacts of monetary policy," Zentner added. 

3. Jamie Dimon shares his perspective. The JPMorgan CEO pegged the chances of a soft landing at half of the 70% to 80% odds many market commentators predict. But he’s not worried about commercial real estate becoming a crisis…unless the economy falls into a recession.

3 things in

Tech

Slaven Vlasic/Getty Images; Jenny Chang-Rodriguez/BI

1. Elon Musk is at odds with Google. Since the launch of Google's Gemini image generator, he's shared and replied to more than 100 posts about the company, many of which were critical. The tech billionaire also had issues with his new PC laptop, and took the matter straight to the top: Microsoft CEO Satya Nadella.

2. Why is Reddit losing so much money? One big answer: It's been hiring a lot of engineers. Last year, Reddit spent 55% of its revenue on research and development. 

3. OpenAI fires back at The New York Times. In response to the Times’ lawsuit against the artificial intelligence company, OpenAI’s lawyers alleged the Times hired someone to "hack" its platforms. They also wrote that the Times gamed the system to produce misleading evidence for the case.

3 things in

Business

PM Images/Getty Images; Jenny Chang-Rodriguez/BI

1. Wall Street wants a stake in your house. American homeowners have seen the value of their houses boom over the past few years, and investors are offering some people big bucks for a piece of their place. But home-equity investments come with risks and could be a better deal for investors than homeowners.

2. AI is fueling a culture clash inside hedge funds. Like the rest of the world, hedge funds are eager to join the generative AI bandwagon. But AI leaders are used to a level of collaboration among peers that isn’t welcomed in the cutthroat world of finance.

3. WTF, Wendy’s? The fast-food chain announced it would start surge pricing its menu items, causing instant frustration across the internet. Even though Wendy’s botched the announcement, variable pricing is the norm across industries, and isn’t as crazy as it sounds. 

In other news

What's happening today

The Insider Today team

Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, editor, in London. 

Get in touch. Email us at insidertoday@insider.com.

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