US High School Economics class: Apple parks its electric car project in sign of EV industry’s struggles
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.
Read our full range of US High School economics picks here.
Click to read the article below and then answer the questions:
Apple parks its electric car project in sign of EV industry’s struggles
Discussion Questions
What was the initial purpose of Tim Cook’s visit to Munich about a decade ago, and what claim did he make during his visit?
Considering Elon Musk’s assertion that “The natural state of a car company is dead,” how do you think this perspective influences the strategies of new entrants in overcoming the intense competition and high barriers to entry in the auto manufacturing market?
What were the main challenges faced by the electric vehicle industry, as highlighted in the article?
According to analyst Dan Ives, why was Apple’s execution of the electric vehicle project insurmountable?
What was one of the few publicly acknowledged elements of Apple’s automotive project, and how did Tim Cook view this technology in 2021?
What were the reasons cited by analysts at Morgan Stanley for modelling Apple’s car effort as adding “$0” towards the tech group’s value?
How does Apple’s progress in generative AI compare to its competitors, and what recent product release signifies its continued investment in new technologies?
Extended Learning
INSTRUCTIONS: Read this article on sunk costs and answer the following questions
What is a sunk cost, and how does it differ from future costs?
What is the sunk cost fallacy, and how can it affect decision-making?
How should businesses approach sunk costs when making decisions about continuing or discontinuing a project?
What are some common psychological factors that contribute to the sunk cost fallacy?
How can individuals and businesses overcome the sunk cost fallacy?
Conclusion
How does Apple’s decision to abandon its electric vehicle project illustrate the concept of sunk costs, and what lesson can businesses and individuals learn from this example when making their own investment decisions?
Joel Miller and James Redelsheimer, Foundation for Economic Education.
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