Updated: Apple talks with McLaren 'have stalled'

Apple was in talks to buy, invest in or work with McLaren, Autocar UK understands – but those talks are now understood to have stalled.

The Financial Times broke the news that Apple and McLaren had been in discussions over a potential £1.5 billion (Rs 14,764 crore) takeover, but this was subsequently denied by a McLaren spokesman, who said: "We are not in discussion with Apple in respect of any potential investment".

However, he added McLaren "regularly has confidential conversations with a wide range of parties".

Autocar UK understands that this last comment alludes to the fact that Apple and McLaren did hold high-level talks about working together on the California-based tech firm's road car, the so-called codenamed Project Titan.

The potential tie-up would have accelerated Apple's plans for its first production car model, which has been in the making for several years and which is tipped to launch in 2020. Thanks to its Formula 1 team and technology division, McLaren has expertise in exotic car production, advanced engineering and data, making it an attractive proposition for a brand like Apple that is new to cars.

Rumours of Apple's interest in and around Formula 1 were first broken by F1 reporter – and former Autocar UK Grand Prix editor – Joe Saward in July. It was suggested then that Apple was interested in buying the rights to Formula 1, which have subsequently been sold to Liberty Media for a reported £6 billion (Rs 59,058 crore). However, it is now understood that talks included collaborating with or buying the McLaren Group.

The asking price of £1.5 billion would have made McLaren Apple's biggest purchase since it bought Beats Electronics in 2014 for $3 billion (about Rs 29,529 crore). Apple is said to be particularly interested in McLaren's extensive patent lists, as well as the company's engineering expertise and technology.

The Apple iCar – will it happen?

The so-called Apple iCar has been the subject of much speculation since rumours of the tech giant's interest in producing a car first surfaced in 2014. Initially dubbed 'Project Titan', it is as yet unclear whether Apple intends to launch its own model or partner with another car maker to bring new technology and connectivity options to the market.

The challenges Apple would face in bringing its own bespoke model to market have been well-documented, so partnering with a manufacturer like McLaren would help to give Apple vital experience of the car industry. Choosing a premium brand also fits with Apple's ethos of making desirable, high-end products. Those known to have held talks with Apple over the past year include executives from Audi, BMW, Ferrari, Fiat-Chrysler Automobiles, Ford, General Motors and Mercedes-Benz.

McLaren has big ambitions to scale up its operations and increase production, with a replacement for the current McLaren 650S being the next car due to launch from the British manufacturer. The company sold 1654 cars in 2015 and wants that number to triple by the end of 2020.

Intriguingly, McLaren is one of the few mainstream car makers not to offer functionality for Apple's CarPlay infotainment system at present.

So why is Apple interested in McLaren?

It's important to differentiate between McLaren's car operations and McLaren Technology Group. The technology side of the business uses innovations derived from McLaren's Formula 1 operations for a variety of purposes, including data collection and analysis, performance engineering and electronic control systems.

The kind of data analysis McLaren provides could be crucial to bringing an electric car to market – for example, predicting traffic flow for an autonomous driving system and simulating how such technology would work in practice.

Having key experience in Formula 1, where updates and technologies must be applied in weeks rather than months or years, will also be a key asset of McLaren Technology Group. Whereas most car makers update their products every five to ten years, Apple updates its technology offerings every year. Having an automotive company that can move in the sort of timescales Apple is used to, therefore, is an obvious appeal.

McLaren Technology Group encompasses McLaren Racing, McLaren Automotive and McLaren Applied Technologies, but it's the last of those three that Apple is understood to be most interested in.

Dozens of staff were reportedly let go from Apple's car project last week, prompting rumours that the company was abandoning its electric car ambitions. That move may now be seen as the company preparing to acquire McLaren.

The Apple iCar – what do we know?

Apple's planned bespoke model will focus on so-called 'disruptive technologies' – meaning it will feature systems and ideas that radically change the face of modern motoring. As such, it's expected to be fully electric, come with an advanced autonomous driving system, have a big focus on connectivity and feature the kind of artificial intelligence on which Apple's current Siri personal assistant is based.

The iCar is expected to feature a highly contemporary design, with a premium look inside and out. Expect plenty of high-quality materials to adorn the interior, with a big focus on intelligent and innovative infotainment systems. Advanced voice recognition and gesture controls are likely. 

Apple is expected to develop its own lithium ion battery for the iCar, allowing it to precisely control the vehicle's range. Apple's batteries are claimed to provide increased energy density due to unique cooling properties, which would likely be used in combination with new-generation electric motors currently being developed by the company.

Current rumours suggest that the iCar – or at least the first iteration of the vehicle – will take the shape of a one-box MPV-style car with similar proportions to Volkswagen’s Budd-e concept – another model which placed significant importance on digitisation and autonomous driving.

Also read: How the Apple iCar could crack the automotive industry