2024 Transportation Flops: Apple Car, Fisker, and More

The Shifting Landscape of Autonomous Vehicles and Electric Vehicles

Initially, companies developing autonomous vehicle technology and electric vehicle (EV) solutions garnered significant attention and investment from venture capitalists and established automotive corporations. These technologies were projected to generate substantial revenue streams and redefine the automotive industry’s profit model, extending beyond traditional vehicle sales.

A Decline in Investment

The period of rapid investment in AVs has largely concluded, with notable exceptions such as Waymo and Wayve. However, even the enthusiasm surrounding EVs, while present at the beginning of 2024, was noticeably subdued compared to previous years.

As 2024 nears its end, the initial excitement surrounding EVs has diminished considerably. Several EV startups have encountered difficulties, and automakers are revising their investment strategies.

Automaker Adjustments and EV Demand

A softening in EV demand began in 2023. While overall sales figures increased, the rate of growth fell short of expectations. Consequently, automakers responded by adjusting their plans.

Ford, for example, altered its strategy, abandoning plans for a fully electric, three-row SUV in favor of hybrid powertrain options. GM, having already reduced EV expenditure in 2023, continued this trend in 2024, recently transferring its stake in the nearly finished Ultium Cells battery plant in Lansing, Michigan, to LG Energy Solution, its joint venture partner.

Stellantis and Mercedes-Benz also paused their plans for establishing new EV battery factories.

Toyota’s cautious approach to EVs, prioritizing gasoline and hybrid vehicles, is now viewed by many as a prudent decision.

Challenges for EV Startups

The year proved challenging for EV startups as well, with many facing financial and operational hurdles.

Autonomous Vehicle Realities

Autonomous vehicles experienced a similar surge in venture capital funding a few years ago, but the complexities of achieving fully driverless technology, an unproven business model, and the lengthy timeframe for realizing returns ultimately tempered expectations.

A wave of consolidation occurred within the sector in 2019 and 2020. Some AV and EV startups sought public market funding through mergers with special purpose acquisition companies (SPACs) to finance commercialization. Others relied on backing from major automakers.

However, setbacks in 2022 and 2023 prompted a scramble for survival, leading to strategic pivots.

Pivoting Strategies

AV startups initially focused on driverless cars began exploring applications in areas like warehousing, mining, and agriculture. These sectors, however, proved to be highly competitive. Alternatively, some companies maintained their original focus while diversifying into dual-use technologies, capitalizing on the growing demand in the defense technology sector.

In conclusion, 2024 marked a year of reckoning, where less resilient startups ceased operations and established corporations reassessed their investments, prompting a shift in priorities.

Apple Car Project

Apple’s long-rumored automotive endeavor, often referred to as the “Apple car project,” has been officially discontinued. The cancellation, while not entirely unexpected, marks the end of a decade-long exploration into the possibilities of electric and autonomous vehicle technology.

Initial plans for the project surfaced approximately ten years ago, generating considerable anticipation. However, in 2024, Apple formally announced the termination of the initiative.

A Decade of Development

For years, speculation surrounded Apple’s automotive ambitions. The company reportedly investigated various approaches, ranging from designing a fully autonomous vehicle to developing a more conventional electric car.

Despite significant investment and engineering efforts, numerous challenges contributed to the project’s ultimate downfall. These included difficulties in achieving technological breakthroughs and navigating the complexities of the automotive industry.

Reasons for Cancellation

Several factors are believed to have influenced Apple’s decision to abandon the car project. These include:

• Technological Hurdles: Developing a truly autonomous vehicle proved more difficult than initially anticipated.
• Strategic Shifts: Apple may have reassessed its priorities and decided to focus on other areas of growth.
• Market Conditions: The competitive landscape of the electric vehicle market is rapidly evolving.

The project faced internal restructuring and leadership changes over the years, further complicating its progress.

Future Possibilities

While the Apple car project as originally conceived is no longer moving forward, the company’s interest in automotive technology may not be entirely extinguished.

It remains possible that Apple could explore alternative approaches, such as developing software or components for other automakers. Speculation regarding a potential revival of the project in the future persists.

The possibility of renewed development efforts in 2025, or beyond, cannot be ruled out.

Arrival's Downfall

The electric vehicle (EV) startup Arrival, initially aiming to revolutionize commercial transportation with its microfactory approach to van and bus production, experienced a rapid decline. Once boasting a valuation exceeding $13 billion, the company secured backing from industry giants like Hyundai and UPS.

Arrival entered the public market in 2021 through a special purpose acquisition company (SPAC) merger. Despite this, financial difficulties emerged by 2023, even after receiving a $300 million investment intended to revitalize the business.

Within a year, Arrival declared that its U.K. operations would be entering administration – the equivalent of bankruptcy protection in the United Kingdom.

Asset Acquisition Post-Bankruptcy

Following the bankruptcy filing, a notable development occurred. The struggling EV company Canoo acquired certain assets from Arrival.

This acquisition represents a potential opportunity for Canoo to leverage Arrival’s technology and resources as it continues its own development efforts in the electric vehicle sector.

Cake

The surge in popularity experienced by e-bikes and e-motorcycles during the COVID-19 pandemic did not automatically ensure long-term viability for all companies in the sector. Swedish firm Cake recently encountered financial difficulties, ultimately leading to a bankruptcy filing in February.

Cake gained recognition for its aesthetically distinctive bicycle designs. However, the company was actively seeking additional funding when a key investor unexpectedly withdrew their support, significantly impacting its financial stability.

Following the bankruptcy announcement, a retail store owner based in Florida acquired a substantial portion of Cake’s U.S.-based stock.

A Resurgence for Cake

Despite the initial setback, Cake has successfully navigated a path to recovery. The company successfully exited bankruptcy proceedings and was subsequently purchased by Brages Holding AS, a Norwegian automotive dealership.

This acquisition represents a new chapter for Cake, providing a foundation for future growth and development within the evolving landscape of electric mobility.

Cruise Robotaxi

Despite recent setbacks, Cruise is not ceasing operations entirely. General Motors, its parent company, has stated that the self-driving vehicle company will continue to exist, though its future form remains uncertain.

However, GM has discontinued funding for the robotaxi program, which represented Cruise’s primary objective. This decision reportedly came as a surprise to many Cruise personnel, including those in leadership positions.

Impact and Future Outlook

The ramifications of this decision are currently unfolding within the organization. Further announcements regarding Cruise and GM’s strategies for automated driving are anticipated throughout 2025.

The shift in focus signals a re-evaluation of the path towards commercial deployment of autonomous vehicles. GM will likely explore alternative avenues for its self-driving technology.

It is important to note that while the robotaxi service is paused, the underlying technology and engineering efforts at Cruise are not necessarily abandoned.

Fisker

The trajectory of Fisker, the electric vehicle startup, experienced significant turbulence throughout the year. Initial challenges centered around the company’s inability to achieve projected sales figures for its Ocean SUV.

Compounding these difficulties, the Ocean SUV became the subject of a federal safety investigation due to reported instances of brake failure. This marked the beginning of a series of escalating issues for the company.

A Cascade of Challenges

The situation deteriorated rapidly, with further federal investigations initiated. These were followed by workforce reductions and, ultimately, a suspension of trading on the New York Stock Exchange.

By June, these cumulative pressures culminated in a bankruptcy filing for Fisker. The company’s downfall unfolded over several months, marked by a series of unfortunate events.

A detailed account of Fisker’s collapse can be found in the reporting of Sean O’Kane, particularly his piece titled “Inside EV startup Fisker’s collapse: How the company crumbled under its founders’ whims.”

This article provides valuable insight into the factors contributing to the company’s ultimate failure. It highlights the role of leadership decisions in the unfolding of events.

The timeline of events reveals a pattern of escalating problems, ultimately leading to the company’s financial instability. Understanding this sequence is crucial for analyzing the case.

Key events included safety concerns, regulatory scrutiny, and financial setbacks, all contributing to the eventual bankruptcy of Fisker.

Ghost Autonomy

The autonomous driving software company, Ghost Autonomy, ceased operations in February of this year.

Initially established in 2017 under the name Ghost Locomotion, the company underwent several strategic shifts during its existence.

Despite securing $220 million in funding, Ghost Autonomy ultimately concluded its business activities.

Company History and Evolution

Ghost Autonomy’s journey began with a focus on foundational autonomous technology.

Over time, the company adapted its approach, resulting in multiple pivots in its core strategy.

These changes reflect the dynamic nature of the autonomous vehicle industry and the challenges of bringing self-driving technology to market.

Funding and Closure

Throughout its lifespan, Ghost Autonomy successfully attracted a substantial amount of investment capital.

A total of $220 million was raised by the startup from various investors.

However, despite this significant funding, the company was unable to sustain operations and ultimately made the decision to shut down.

Industry Context

The closure of Ghost Autonomy highlights the competitive and financially demanding landscape of the autonomous driving sector.

Developing and deploying self-driving technology requires considerable resources and faces numerous technical and regulatory hurdles.

Many startups in this space are navigating these challenges, and not all are able to achieve long-term viability.

Lilium

The German electric vertical takeoff and landing (eVTOL) startup, Lilium, ceased operations in October following financial difficulties.

Remarkably, the company had secured over $1 billion in funding from investors prior to its public listing in 2021.

This public offering occurred through a reverse merger with Qell, a special-purpose acquisition company (SPAC), on the Nasdaq Exchange.

Following unsuccessful attempts to find a buyer, Lilium halted operations on December 20th.

Consequently, approximately 1,000 employees were made redundant.

Recent Developments

A potential rescue has emerged in the form of an investor consortium.

They have reached an agreement to acquire Lilium’s two subsidiary companies.

If finalized, this acquisition will facilitate a restructuring of Lilium and allow it to emerge from insolvency proceedings – a process comparable to bankruptcy in the United States.

Continued Investment in the eVTOL Sector

Despite Lilium’s challenges, interest in electric aircraft startups remains strong.

Several companies have recently secured significant funding.

• Vaeridion, a German firm focused on short-haul electric aircraft, completed a €14 million Series A funding round.
• Archer Aviation raised $430 million to support the development of aircraft for defense applications.
• Toyota invested $500 million in Joby Aviation.

Uncertain Future

The outlook for the eVTOL sector remains uncertain despite these investments.

Significant challenges and potential instability lie ahead for companies operating in this emerging market.

The path forward is not yet clearly defined.

Northvolt

In November, Swedish battery producer Northvolt revealed its intention to declare bankruptcy within the United States. Simultaneously, Peter Carlson, the company’s co-founder and Chief Executive Officer, tendered his resignation.

Having garnered significant investor interest, Northvolt successfully secured $14.26 billion in funding, as reported by PitchBook. This included a substantial $1.2 billion investment round completed in 2023, specifically earmarked for the expansion of its North American operations.

Financial Backing and Expansion Plans

The considerable financial support received by Northvolt demonstrates the initial confidence placed in its vision. The $1.2 billion funding secured in the previous year was strategically allocated to bolster the company’s presence and capabilities across North America.

Despite this substantial investment, the decision to file for bankruptcy in the U.S. signals significant challenges faced by the battery manufacturer. The resignation of CEO Peter Carlson further underscores the gravity of the situation.

Recent Developments

Northvolt’s situation highlights the competitive and complex landscape of the battery manufacturing industry. The company’s struggles may reflect broader economic pressures or specific difficulties in scaling production and achieving profitability.

The bankruptcy filing and leadership change represent a pivotal moment for Northvolt, raising questions about its future trajectory and the viability of its ambitious expansion plans.

Phantom Auto

A California-based startup specializing in teleoperation technology has ceased operations as of March. Phantom Auto had created a platform enabling remote vehicle control, with operators potentially situated across vast distances.

The company successfully secured $95 million in funding throughout its existence. This capital originated from diverse sources, encompassing angel investors and venture capital firms.

Funding Sources

• Bessemer Venture Partners and Maniv Mobility represented early-stage VC participation.
• InfraBridge, a private equity firm, also contributed to the funding rounds.
• Strategic investments were received from companies like ArcBest and ConGlobal.

The core functionality of Phantom Auto’s platform involved allowing a remote driver to take control of a vehicle when necessary. This technology aimed to address situations requiring human intervention in autonomous systems.

Despite significant investment and a promising technological approach, the company ultimately faced closure. The shutdown highlights the challenges inherent in developing and commercializing advanced autonomous vehicle technologies.