Apple Car battery talks breaking down under weight of Apple's demands

AppleInsider

Apple's attempt to have two battery manufacturers build plants exclusive to the Apple Car have failed, with only a glimmer of hope remaining that they will start up again.

Credit: Apple

Two of three potential Apple Car vendors are reportedly having difficulty meeting Apple's production requirements. Specifically, a new report claims that the main stumbling block is manufacturing advanced lithium ion phosphate (LFP) batteries in the United States for Apple, and the effort it would take for exclusivity.

Suppliers cited in the report are BYD and CATL. CATL is the world's main battery manufacturer for electric vehicles.

CATL is a Chinese firm, which is said to be complicating matters. It reportedly had difficulty sourcing appropriate staff in the US suitable to assembling a product development team just for Apple.

BYD has a plant in the US already, seemingly making it a better choice. However, the company allegedly said to Apple that it would not build a plant just for the Apple Car.

The report on Friday morning from Reuters claims that the companies told Apple at some point in the last two months that they were not able to meet Apple's requirements.

Since both manufacturers told Apple that they would not be able to meet demands, talks have stalled. Both companies, however, are said to remain open to overtures from Apple.

A representative from CATL issued a statement about the report to Reuters. In its statement, it said that it is "evaluating the opportunity and possibility of manufacture localization in North America." Historically, the company has spun off a dedicated team for each customer.

Apple has been developing vehicular systems since 2014. At the time, it was developing its own physical passenger vehicle.

Since then, however, Project Titan has undergone restructurings, staff cuts, and a change of direction to autonomous systems.

Despite that reported shift in focus, rumors, hires, and patents have all suggested that Apple is still mulling the release of a physical car.

In December 2020, Apple was said to have moved its car division to the leadership of AI and Siri chief John Giannandrea. According to Reuters, Apple's vehicular development have progressed to a point that it now aims to build a consumer vehicle itself.

That lines up with predictions from oft-accurate analyst Ming-Chi Kuo, who has previously forecast an "Apple Car" could arrive sometime between 2023 and 2025. Kuo also recently said that Apple was working with long-time supply partner TSMC on a chip for a Tesla-like Apple Car.

Apple reportedly began talks with Canadian mobility technology firm Magna International -- known for producing parts for automakers like General Motors, BMW, and Tesla -- to discuss manufacturing the vehicle. However, those discussions reportedly flamed out when Apple's exact car plans became unclear.

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dk49

Why does Apple want an exclusive plant? They can always sign an exclusivity contract with the manufacturer if they don't want that battery tech to be sold to anyone else (if they have some parents over that battery tech).

n2macs

dk49 said:

Why does Apple want an exclusive plant? They can always sign an exclusivity contract with the manufacturer if they don't want that battery tech to be sold to anyone else (if they have some parents over that battery tech).

Apple likes to keep all of its secret projects from prying eyes. An exclusive plant only makes since.

dk49

n2macs said:

dk49 said:

Why does Apple want an exclusive plant? They can always sign an exclusivity contract with the manufacturer if they don't want that battery tech to be sold to anyone else (if they have some parents over that battery tech).

Apple likes to keep all of its secret projects from prying eyes. An exclusive plant only makes since.

I don't think that companies like Foxconn have exclusive plants for the iPhone. 

bobolicious

... might it be both proprietary design and driver data driven ...?
www.verizonconnect.com/resources/ebook/fleet-trends-report-2021/
www.smartdatacollective.com/all-electric-future-how-big-data-will-vital-transition/

GeorgeBMac

dk49 said:

Why does Apple want an exclusive plant? They can always sign an exclusivity contract with the manufacturer if they don't want that battery tech to be sold to anyone else (if they have some parents over that battery tech).

My first accounting job out of college in the early 70's was with an RCA plant that manufactured police radios.

One of the policies of that plant was to use small & medium sized suppliers as much as possible because, with its size, it had leverage over them.   Simply put:  the company could run any supplier out of business simply by no longer buying from them.  Those suppliers had to toe the line set by RCA or die.

I suspect the same principle -- LEVERAGE -- exists here with a demand for exclusivity.

Once a company sinks a few billion into a plant devoted only to Apple's wants and needs, it is at Apple's mercy -- which has never been one of its strong points.

crowley

Smart suppliers.  Get into bed with Apple at your peril.

MplsP

Apple’s problem here is there is no shortage of EV manufacturers looking for batteries. Even with Apple’s size, they are a total newcomer to the EV market. Throwing all your eggs in Apple’s basket would really be foolish for a battery manufacturer. Since they have other options they really don’t have the incentive to cave.

mknelson

MplsP said:

Apple’s problem here is there is no shortage of EV manufacturers looking for batteries. Even with Apple’s size, they are a total newcomer to the EV market. Throwing all your eggs in Apple’s basket would really be foolish for a battery manufacturer. Since they have other options they really don’t have the incentive to cave.

Yes, and may of them have set up exclusive factories in partnership with EV manufacturers.

GM with LG and Tesla's many plants with their assorted battery partners immediately spring to mind.

*And the plants are in the US so that clearly doesn't have to be a problem.

larryjw

GeorgeBMac said:

dk49 said:

Why does Apple want an exclusive plant? They can always sign an exclusivity contract with the manufacturer if they don't want that battery tech to be sold to anyone else (if they have some parents over that battery tech).

My first accounting job out of college in the early 70's was with an RCA plant that manufactured police radios.

One of the policies of that plant was to use small & medium sized suppliers as much as possible because, with its size, it had leverage over them.   Simply put:  the company could run any supplier out of business simply by no longer buying from them.  Those suppliers had to toe the line set by RCA or die.

I suspect the same principle -- LEVERAGE -- exists here with a demand for exclusivity.

Once a company sinks a few billion into a plant devoted only to Apple's wants and needs, it is at Apple's mercy -- which has never been one of its strong points.

Whether it's a reasonable policy depends on the negotiating positions. If Apple is expecting a company to build a plant on its own dime just for Apple is clearly a non-starter for all but the most clueless companies. If Apple is willing to cough up the cash, that's a different case entirely.

As the article points out, one company backed out because they couldn't find qualified staff in the US. I think that's likely to be the killer of all attempts to have the batteries made in the US. The US skills deficit has been increasing non-stop for 40 years -- and that is just one of the factors that will impede manufacturing in the US. 

Apple will go outside the US to get it done -- but they're having to prove they had no choice. 

macintoshM1

I’ve long suspected that the environmental aspects of current battery tech is the limiting factor on the company’s plans to introduce a car. No matter who makes it or what brand it could carry which I suspect could be Apple. They won’t proceed beyond development until they are assured the corporate commitment to environmental standards can be met all the way up and down the supply chain.  I can see a collaboration release before the actual Apple car comes along as the data that tens or hundreds of millions of miles of real world use is invaluable.  If we know anything about Apple Data is fundamental in decisions. 

A few years back when apple could easily have afforded to buy Tesla.  One somewhat floundering production line. The true value of the company lay in the data set. And how do you go about establishing that value? Without possession of the data to parse it and discover the quality.  

The data was likely worth 5x the rest vof the assets.  So the path to produce a commercial product lies beyond the accumulation of enough experience and data demanded. A fairly long path. 

darkvader

I don't understand why Apple is still following this dead end path.

Apple is not a car company.  Apple does not understand how to build cars.  Tesla already has the high-tech-low-build-quality-anti-right-to-repair car market sewn up.

Yes, I said low build quality.  Apple IS known for that at this point, they use fancy machined aluminum cases, but put garbage keyboards and too-short too-weak display cables in them, and can't be bothered to actually fix those screwups for existing customers.  They also make displays so thin that they break easily, I've seen more broken laptop screens in the last few years than I did in the decade before that.

And of course there's the self-driving thing.  Apple is TERRIBLE at making a voice-response AI, there's no way they're going to be able to keep a car on the road with Siri-grade crap.

WHEN, not if, an Apple car fails it won't kill the company, but it's going to be a sad joke if it ever sees the light of day.

byronl

macintoshM1 said:

I’ve long suspected that the environmental aspects of current battery tech is the limiting factor on the company’s plans to introduce a car. No matter who makes it or what brand it could carry which I suspect could be Apple. They won’t proceed beyond development until they are assured the corporate commitment to environmental standards can be met all the way up and down the supply chain.  I can see a collaboration release before the actual Apple car comes along as the data that tens or hundreds of millions of miles of real world use is invaluable.  If we know anything about Apple Data is fundamental in decisions. 

A few years back when apple could easily have afforded to buy Tesla.  One somewhat floundering production line. The true value of the company lay in the data set. And how do you go about establishing that value? Without possession of the data to parse it and discover the quality.  

The data was likely worth 5x the rest vof the assets.  So the path to produce a commercial product lies beyond the accumulation of enough experience and data demanded. A fairly long path. 

the environmental aspect of batteries don’t really matter since ev’s are overall significantly better for the environment 

byronl

darkvader said:

I don't understand why Apple is still following this dead end path.

Apple is not a car company.  Apple does not understand how to build cars.  Tesla already has the high-tech-low-build-quality-anti-right-to-repair car market sewn up.

Yes, I said low build quality.  Apple IS known for that at this point, they use fancy machined aluminum cases, but put garbage keyboards and too-short too-weak display cables in them, and can't be bothered to actually fix those screwups for existing customers.  They also make displays so thin that they break easily, I've seen more broken laptop screens in the last few years than I did in the decade before that.

And of course there's the self-driving thing.  Apple is TERRIBLE at making a voice-response AI, there's no way they're going to be able to keep a car on the road with Siri-grade crap.

WHEN, not if, an Apple car fails it won't kill the company, but it's going to be a sad joke if it ever sees the light of day.

the car will be released ONLY if apple decides it’s worthy. they won’t just come out with anything.as to why they would wanna enter that market, the car industry is undergoing big changes right now. electric vehicles, software focus, self-driving, ride-sharing. the car will never be the same. when the car drives itself (or even when it doesn’t, this is still true for the passengers) it will be a content consumption computing platform, or even a gaming platform. i believe that the car will be the next big emerging computing platform (along with AR glasses). we know how apple wants to have central positions in computing platforms. apple wants to occupy our screen time in the car, they don’t wanna lose it to tesla. tesla has recognized this future and this is one of the reasons they’re doing so well. this is one of the reasons they’re hired so many apple employees and increasingly make their cars like a phone on wheels. this is why they emphasize on self driving and, on their redesigned model s page, they display gaming on the screen on most photos. this is why the have streaming services on the car. because it’s a platform for this. apple has to have a car platform, the same way they’ll need to have an AR glasses platform and the same way they need to have a phone platform, computer platform, tablet platform, smartwatch platform, etc etc etc. A car will be a part of an electrified network of mobility services, driving themselves, connecting to each other and - like cell phones - generating an array of data and new business opportunities.

13485

larryjw said:

GeorgeBMac said:

dk49 said:

Why does Apple want an exclusive plant? They can always sign an exclusivity contract with the manufacturer if they don't want that battery tech to be sold to anyone else (if they have some parents over that battery tech).

My first accounting job out of college in the early 70's was with an RCA plant that manufactured police radios.

One of the policies of that plant was to use small & medium sized suppliers as much as possible because, with its size, it had leverage over them.   Simply put:  the company could run any supplier out of business simply by no longer buying from them.  Those suppliers had to toe the line set by RCA or die.

I suspect the same principle -- LEVERAGE -- exists here with a demand for exclusivity.

Once a company sinks a few billion into a plant devoted only to Apple's wants and needs, it is at Apple's mercy -- which has never been one of its strong points.

Whether it's a reasonable policy depends on the negotiating positions. If Apple is expecting a company to build a plant on its own dime just for Apple is clearly a non-starter for all but the most clueless companies. If Apple is willing to cough up the cash, that's a different case entirely.

As the article points out, one company backed out because they couldn't find qualified staff in the US. I think that's likely to be the killer of all attempts to have the batteries made in the US. The US skills deficit has been increasing non-stop for 40 years -- and that is just one of the factors that will impede manufacturing in the US. 

Apple will go outside the US to get it done -- but they're having to prove they had no choice. 

Both opinions here have merit, and doubtless many examples could be found to support each.

My question is: why is Apple so late to the battery manufacturing game--with whomever as a partner. It probably should have been on the fast track once Apple determined that they were serious about building an EV or hybrid. I know Apple had a patent or two on proprietary battery design for the car, maybe that sent them down the wrong path. Or is it just another ramification of the constantly shifting project management?