Benzinga - by Anan Ashraf, Benzinga Editor.
Editor’s note: This article’s headline and body were updated to reflect Tesla CEO Elon Musk’s and Vice President of Investor Relations Martin Viecha’s reactions to the analyst’s comments.
Morgan Stanley analyst and Tesla bull Adam Jonas suggested on Wednesday that Apple Inc‘s (NASDAQ:AAPL) lack of a "monumental dataset" for training its autonomous car may have been a potential reason for the company dropping the project. Tesla CEO Elon Musk agreed with the hypothesis.
What Happened: Jonas observed that due to high expectations for the company, Apple couldn't have simply produced another car with steering wheels. However, creating an autonomous vehicle, the analyst pointed out, requires extensive testing and data from public roads spanning billions of miles.
According to a report earlier this month from The Washington Post, Apple had only 67 vehicles testing autonomous capabilities over 450,000 miles between December 2022 and November 2023. This, Jonas remarked, significantly contrasts with Tesla's fleet of over 5 million vehicles equipped with full self-driving hardware and software, covering an estimated 50 billion miles annually, which gathers data to enhance its autonomous driving abilities.
"An AV cannot be a surprise ‘and one more thing' unveiling at an Apple WWDC," Jonas emphasized.
"Tesla's fleet drives more miles in 5 minutes than Apple's fleet reportedly drives in a year," the analyst added, also acknowledging that the extensive dataset could offer Tesla an advantage in machine learning and, consequently, autonomous driving.
Tesla Reacts: Tesla Vice President of Investor Relations Martin Viecha took to X on Wednesday to term Jonas’ take as a “good summary.” Musk agreed with Viecha with a simple, “Yeah.”
Yeah— Elon Musk (@elonmusk) February 29, 2024
Car Project Closure: Bloomberg reported on Tuesday that Apple has halted its electric car project after nearly a decade. According to the report, many Apple employees involved in developing the electric vehicle will now transition to the company's generative AI division. Layoffs are anticipated, although the exact number of affected workers remains unclear.
The decision to conclude the project was finalized internally among top executives in recent weeks following ongoing pressure from the company's board, the report stated. Apple had been investing hundreds of millions of dollars annually in research and development for the project, and given recent strategic adjustments aimed at accelerating time to market, some of the company's senior executives expressed concerns about the car's potential profit margin, the report added.
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