Smartphones to EVs is not a natural transition. Ask Apple

The decision of Apple Inc. to shelve its plans to build a fully autonomous EV is a blow to climate action and the EV ecosystem

The world is staring at a climate catastrophe. This is visible from the unabated increase in the levels of greenhouse gas emissions this year. The emissions rose by 1.1 per cent in 2023 from 2022 to reach a new high of 37.4 billion tonnes. This increase happened despite the tremendous rise of renewable energy. When the global temperatures have already risen by 1.1°C from the pre-industrial levels, the window to limit the rise of global temperatures by 1.5°C by the turn of the century remains narrow.

Decarbonisation of transport, i.e. reducing emissions from transport, remains a potent tool for climate action as solutions like Electric Vehicles (EVs) have been tested and proven in real-world conditions. The transportation sector accounts for 14 per cent of global CO2 emissions, and is responsible for a majority of air pollution in our cities. The recent decision of Apple Inc. to shelve its plans to build a fully autonomous EV is a blow to climate action and the EV ecosystem. Why did it do so? What are the implications for India?

But first, why are many mobile manufacturing firms looking to diversify into EVs? We have had examples of Xiaomi, Foxconn, Samsung, Apple, etc. trying to build EVs. The biggest reason is technological synergy, besides other motives of revenue diversification, future growth etc. EVs are essentially sophisticated electronic devices, that rely heavily on different computing technologies for their smooth functioning.

EVs derive their energy from batteries thus resembling more with the smartphone than traditional internal combustible engine (ICE) vehicles. Firms such as Samsung have mastered the manufacturing and use of lithium-ion batteries, which are the most prominently used battery chemistry for EVs.

Further EVs rely heavily on software technologies like battery management systems, user interface technology, wireless communication technology, and vehicle to vehicle-to-everything communication for its operations. It is important to appreciate that these are not an add-on feature for EVs but form the backbone of their technology. Smartphone manufacturers have long perfected the art of software design and development, and are in a better position to replicate this for EVs.

But EVs also demand an ecosystem approach to its manufacturing which requires backward and forward integration of supply chains. This includes sourcing raw materials like lithium, cobalt, nickel, etc, which are critical minerals for battery manufacturing. Moreover, sourcing rare earth minerals like dysprosium and terbium is essential for the manufacturing of chips that are used extensively in EVs.

This is an area where the dominance of China is starkly visible. About 87 per cent of the world’s rare earth, 58 per cent of lithium, and 65 per cent of cobalt are processed in China. The domination in the supply chain is reflected in the usage and sales of EVs in China. Out of 18 million EV cars that are on-road across the world, 61 per cent are in China and 95 per cent of the world’s 700,000 e-buses are in China. On the contrary, the United States has just 11 per cent of the world's electric cars and a negligible share of the world’s e-bus. Its absence in the critical minerals supply chain is also visible.

Apple while pursuing its mission of building fully autonomous EVs would have faced roadblocks because of the mere absence of an EV ecosystem (at the global size and scale) in the Western world. Apple has a core competency in software design and R&D, but it would have needed partners for areas like battery manufacturing and critical mineral processing.

One must acknowledge that Apple's goal of building a fully autonomous car is a technologically difficult proposition. It requires training the algorithms to various real-like traffic conditions where the system can make decisions, even in the rarest of rare cases. With the elimination of the steering wheel in a fully autonomous car, there is little control that a human occupant has over the car. Further, autonomous vehicles rely extensively on a variety of sensors, including cameras, LIDARs, and GPS to interpret their surroundings. The reliability of these sensors, currently, to accurately predict their real-life surrounding is also not at the level that is required in a fully autonomous car.

Apple’s suspension of plans to develop fully autonomous EVs should not be looked at as an isolated event. With its $3 trillion market cap (which places its seventh when national GDPs are compared) capital was not the problem for Apple. Even with this amount of capital, Apple’ failure to pull through this project shows the requirement of necessary interventions by the government and other stakeholders to succeed.

There is a lot to learn for India which is foraying into EVs with ambitious plans to dominate the global supply chains, and create manufacturing and investment opportunities here. India needs to invest heavily in the R&D of EVs and their components, with necessary state support to develop solutions that are for the country, and the Global South.

The schemes like the Production Linked Incentive (PLI) scheme for battery manufacturing, and automobile components are a step in the right direction, but more needs to be done to localise the manufacturing of electric motors, sensors, chips, etc.

Apple might have shelved its project but the world has a lot to learn from its journey in decarbonisation of transport and EVs.

(Abhishek Saxena, previously with Niti Aayog, is a consultant working on electric mobility and Climate Change. X: @MusingAbhishek.)

(The views expressed above are the author's own. They do not necessarily reflect the views of DH)