Apple signs deal with Volkswagen for self-driving employee shuttles

Apple is asking Volkswagen to supply it with self-driving employee shuttles as part of its scaled-down automotive ambitions, The New York Times reports. Citing three people familiar with Apple’s car project, the company has signed a deal with Volkswagen to provide T6 Transporter vans that can be transformed into self-driving shuttles for employees, but sources reveal that the project is not only behind schedule and consuming “nearly all of the car team’s attention” but that it also seems Volkswagen wasn’t Apple’s first choice. According to people familiar with the negotiations, Apple has reportedly failed to come to amenable terms in discussions with BMW and Mercedes-Benz after several rounds of talks that finally ended after each refused to give Apple control over the data and design of the vehicles.
The New York Times report goes on to highlight some of Apple’s other struggles and changes in direction that have led to high employee turnover on its car team, along with a lack of clear vision or even any near-term commercial goals. Apple originally began its project, codenamed “Titan” back in 2014, and has reportedly been testing Lexus RX450h self-driving cars on roads in California, and a report earlier this month revealed the company now has the second-largest test fleet, behind GM’s Cruise program. However, while Apple originally had very ambitious plans for Project Titan — a revolutionary vehicle that would “upend society and industry” — over the course of time the company discovered that even with its extremely deep pockets, building a car was a more challenging project than it had anticipated, and realized it had to shift its focus into finding a manufacturing partner to build the vehicle rather than doing everything in-house. According to former employees, this strategy also shifted over time — the initial vision being to simply get help in building an Apple-designed vehicle gradually became simply an Apple software and sensor package that it was asking manufacturers to retrofit into their own vehicle designs.

In searching out a formal partner, Apple first worked with Magna Steyr, a Canadian-Austrian contract manufacturer just to get the ball rolling, but then moved on to attempt to court BMW and Mercedes-Benz, resulting in on-and-off negotiations for several years that seemed to remain stuck on which company would own the customer experience, relationship, and data. Apple also reportedly held talks with Nissan in Japan, BYD Auto in China and sports-car maker McLaren in Britain, among others, but according to sources, all of these failed due to similar stalemates on which company would be in the driver’s seat. Possibly as a result of Volkswagen’s recent fall from grace in the midst of the emissions tests scandal, the company was considerably more eager to work with Apple, resulting in the two companies coming more easily to an agreement. As part of the deal, a Volkswagen subsidiary, Italdesign, will now be designing custom Volkswagen T6 vans as electric self-driving shuttles, build on the standard frame, wheels, and chassis with a number of Apple-designed components, including not only the dashboard, but also the seats, computers, sensors, and a large electric car battery. The shuttles will ferry employees between Apple’s campuses in Silicon Valley, and will still have a driver behind the wheel to act as a backup, and an operator in the passenger’s seat to track the van’s performance. The shuttle was originally intended to be ready by the end of 2018, but it seems unlikely Apple will meet that deadline, and it’s unclear whether the company’s partnership with Volkswagen will extend beyond the shuttle project, or even what Apple’s other automotive plans are.

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