Apple Inks Driverless Car Deal With Volkswagen

Apple Inc. (AAPL) has signed a deal to turn some of Volkswagen AG's (VLKAY) new T6 Transporter vans into self-driving shuttles for its employees, according to the New York Times.

The iPhone maker has reportedly been working on a shuttle program since last summer. Three sources told the Times that the project, which requires Apple to install its own self-driving software in Volkswagen vehicles, is behind schedule and “consuming nearly all of the Apple car team's attention.”

Dwindling Aspirations

Apple’s deal with the iconic German brand reflects a change in course for the Cupertino, California-based company’s self-driving vehicle aspirations. Initially, Apple wanted to build its own all-electric autonomous vehicle. Judging by this announcement, the company has now settled on building software to license out to more experienced automakers.

In previous years, Apple sought to partner with the likes of BMW AG (BMWYY) and Daimler AG’s (DDAIF) Mercedes-Benz to develop an all-electric, self-driving car, five people familiar with the negotiations told the Times. However, no deal was ever completed because Apple was asking potential candidates to hand over control of data and design.

Last June, CEO Tim Cook hinted that Apple had lowered its aspirations, telling Bloomberg that the company had switched its attention to “focusing on autonomous systems.” Five former Apple employees have now told the Times that the company’s self-driving plans have suffered from repeated changes in direction that have damaged morale and led hundreds of employees to leave.

Apple is currently testing several Lexus SUVs equipped with self-driving hardware and software in Cupertino and the surrounding areas as part of its shuttle program. Executives leading the project told Mr. Cook that the shuttle would be completed by the end of 2018. However, that deadline is expected to be missed.  

The Times reported that the project lacks a clear plan beyond the vans and added that is unclear whether Apple’s partnership with Volkswagen will extend beyond the shuttle. (See also: Stock Market Too Optimistic About Self-Driving Adoption: Morgan Stanley.)

Companies leading the race to develop automated driving systems include: General Motors (GM), Alphabet's (GOOGL) Waymo, Daimler, Ford Motor Company (F), Volkswagen and Tesla Inc. (TSLA). (See also: 8 Stocks Fueled by the Autonomous Vehicle Race.)

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