Analysts at investment bank Morgan Stanley say that Apple was too far behind in the car market, and cancelling the Apple Car means it can put its resources to better use in AI.
Siri AI should benefit from the cancellation of Apple Car
While the apparent cancellation of the Apple Car project has surprised many, analysts at Morgan Stanley say it has never factored in their analysis of the company.
Specifically, Morgan Stanley is retaining its price target for Apple of $220, because it had put no value on Apple Car. That's because, it now argues, Apple was still only at a testing stage where 20 firms are already selling electric vehicles (EVs), and over 200 are working on EV technology.
Furthermore, the investment firm believes the reported $1 billion figure that Apple was said to be spending annually on the project
Consequently, the Morgan Stanley investor note seen by AppleInsider says that the time, money, and resources spent on the Apple Car will have much more effect and impact if they are redeployed to AI. The report was clear that was the case, explicitly saying that engineers were going to shift to that department, remaining under John Giannandrea.
The analysts also say that a cancellation would demonstrate Apple's discipline over the cost of long-term projects.
This does contrast with Morgan Stanley's 2021 assessment that the "game changer" Apple Car would be the "ultimate EV bear case," and also affect stocks in rival automotive companies.