Apple's Electric Car Project Won't Involve BMW, Daimler: Report

The potential partners in Apple's rumored electric car project failed to reach a workable agreement with the technology company.

Apple, electric cars, BMW, Daimler, iCar, Titan, Google

Apple has been searching for months for a partner in its quest to build electric cars, but the list of potential partners no longer includes BMW and Daimler, both of which pulled out of the talks, according to a report.

BMW dropped out of talks with Apple last year, while Daimler bowed out recently, based on sources who asked to remain anonymous, according to an April 21 story by the German business daily Handelsblatt. Both automakers dropped out of the "iCar" talks with Apple because they "fear the U.S. tech giant will end up in the driver's seat" as the vehicle is planned, built and marketed, the story reported.

With BMW and Daimler out of the running, Apple's favorite potential partner now appears to be Magna, a Canadian-Austrian company, the story reported. "Sources said the talks with both German carmakers collapsed over the key questions of who would lead the project and, above all, which company would have ownership of the data," according to Handelsblatt. "Apple wants the car to be closely built into its own cloud software, while the German carmakers have made customer data protection a key element of their future strategy."

The German automakers are "worried they would put off buyers if information on journeys, driving behavior and consumer spending habits were processed in America by IT giants like Apple or Google, the report states. "That's why Daimler, BMW and Audi last year purchased Nokia's intelligent mapping business HERE: To retain sovereignty over the data generated by drivers."

Despite BMW and Daimler dropping out of the talks, Apple is still continuing negotiations with German auto industry suppliers and technical experts to pursue its electric car project, the story reported.

For Apple and its CEO Tim Cook, the loss of BMW and Daimler from the talks is likely a disappointment since the "top German premium brands were believed to have been his first choice," the story reported. Apple has even opened up an office in Berlin with a goal of finding and hiring experts in the German auto community to hire away from the German automakers.

Apple's interest in building electric cars is still in its early stages. In September 2015, reports circulated that the company was looking closely at building electric cars by 2019 and that it was committing itself to the effort, according to an earlier eWEEK story.

The plans began moving forward more than a year after the company began early discussions about an Apple car, and the project was given a code name—Titan. Apple has also been eyeing self-driving cars in a separate venture like its rival Google, but the electric cars are not being seen specifically as driverless cars. For Apple, building any kind of vehicle could be a challenge since they are filled with a large number of systems that are not in the consumer products company's fields of expertise, such as engines, suspensions and more.

In January, Apple had another potential setback in the electric car program when reports surfaced that Steve Zadesky, the Apple executive who has been spearheading the company's electric car program for the last two years, was leaving Apple for personal reasons. Zadesky, who has been with Apple for 16 years, has been working on the Apple electric car program since 2014. He formerly was an engineer with Ford Motor Co. until being employed by Apple in 1999. At Apple, Zadesky has tripled the size of the company's staff that works on automotive initiatives, giving it a head count of about 600. Zadesky previously worked inside Apple in the company's iPod and iPhone projects before joining the electric car team.

Back in February 2015, the first reports about Apple looking at building electric cars began to surface, according to an earlier eWEEK article, as the company continued to explore new business opportunities outside its core consumer technology and computer, tablet and smartphone businesses. Apple, at the time, was in the process of hiring about 200 people from inside Apple and from potential competitors like Tesla to develop technologies for an electric car, according to reports. Some of those hires were revealed in a lawsuit filed against Apple in February 2015 in Massachusetts federal court that alleged that Apple embarked on an aggressive campaign in June 2014 to poach employees from A123 Systems, a Livonia, Mich., company that makes electric car batteries.