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Late in February 2024, news broke that Apple was abandoning its electric vehicle (EV) venture, known to many by its codename ‘Titan.’ Rumours of the project first surfaced in 2014, when Titan ventured over the investment ridge for what would become a decade-long expedition – though no-one could predict it would languish in the valley below and burn over US$10b in the process.
Apple’s decision to call it quits made headlines around the globe, leading some to declare a victory for EV giant Tesla. Here in Australia the Sydney Morning Herald did just that, citing Tesla don Elon Musk’s characteristic response on X (formerly Twitter); it consisted of just two emojis, one a salute, the other a cigarette.
However, Apple’s reverse from the EV market can be read as more than a win for Tesla. It is an impact investment gone awry. Titan’s promise of electric power sat squarely in the environmental and social trend among the world’s biggest corporations; in 2023, Nike ran in the sustainable direction, announcing greener foam in its sneakers. The critical punter, however, will recognise such moves are made not only in good faith, but doubly in aim of appearing attractive to the contemporary customer and investor alike.
Press-pleasing projects – like Apple’s Titan – validate companies in the realm of ESG (environmental, social and corporate governance). ESG has fast become a leading metric by which investors make their picks. Entire exchange-traded funds (ETFs) are qualified by ESG evaluation – and Apple leads some of the world’s largest. Despite well-documented issues in Apple’s production line (from subcontractor Foxconn’s poor working conditions to tech industry-wide concerns over the sourcing of lithium), the Big Three of fund managers all count Apple as its second-biggest holding in their flagship American ESG-centric ETFs. Indeed, across Vanguard, State Street and BlackRock (under the iShares brand), the tech giant variably comprises between 6 and 9% of each fund. (For more about the pitfalls of ESG labelling, see Adam Percival’s article for SUIIS, “The Broad and Blurry World of ‘Good’ ETFs”).
It is important to note that Project Titan was and is not Apple’s only ESG-friendly venture. Still, its failure calls into question what effect developing a headline-grabbing project and then backing out has not only on the stock price, but on the everyday investor’s understanding of what makes a company environmentally and/or socially friendly. Interestingly, Titan was an apparent worry to Apple investors, who sent the stock “up about 0.7 per cent in late trade after Bloomberg reported the news.”
While positing a correlation between this minor bump and a public trend in ESG disinterest would be dubious at best, Apple’s abandonment of EV does raise eyebrows as it continues to constitute the lion’s share of ESG funds in the US. In fact, Apple’s ESG status seems as fickle as the ESG sector itself. The metric has been a favourite object of critique in recent times. In February, Republican lawmakers attempted to outlaw the qualifier in the state of New Hampshire – though one needn’t look far for the political logic of such a move. Elsewhere, Morningstar analysts reported a general outflow from the ESG market globally, with American investors alone having “withdr[awn] a net [US]$5.1 billion in the final three months of 2023.”
However, a momentary shunning of ESG does not mean investors have entirely lost interest in sustainable investing. Just as Morningstar reported the outflow, they also published findings in early 2024 that indicated an overwhelming public interest (77%) in sustainable investing among American individual investors.
Whether in the EV market or in the ESG fund, whether a corporation or an individual, all investments – let alone impact-oriented ones – carry inherent risk. Impact-oriented projects may be noble in purpose. But they also carry the added exposure of existing in a world yet to fully acclimatise to greener practices. Apple’s Project Titan got lost in the valley between investment and impact. Such a venture’s failure reminds of the need to keep tabs on the world’s major players – and ensure they rightly earn their credibility in impact investing circles.
