Apple execs won't confirm their plans but hint of "massive change" coming in the auto industry.

While tech giant Apple isn’t ready to confirm the car project it has reportedly dubbed Project Titan, it has become what one rival calls “an open secret.” But while the program appears to be moving ahead, sources warn that it has suffered a series of unexpected setbacks.

One of the key members of a team now said to number as many as 1,000 employees plans to leave, while another senior Apple exec has expressed his frustration at the progress the program is making, according to reports from Silicon Valley.

That said, after touring Silicon Valley this past week, Daimler AG CEO Dieter Zetsche told the German publication Welt am Sonntag he was impressed with what he learned about the car programs at Apple and tech rival Google.

“Our impression was that these companies can do more and know more than we had previously assumed. At the same time they have more respect for our achievements than we thought,” said Zetsche, who also serves as head of the Mercedes-Benz brand.

The notoriously secretive Apple has been handling Project Titan like it has its other major tech programs, refusing to comment, though occasionally dropping some tantalizing hints – CEO Tim Cook last October telling those attending a Wall Street Journal event, “there will be massive change in the (auto) industry.”

Some insiders hint Apple may be pairing up with BMW on its battery-car brand "i."

The company is known to have hired a number of automotive veterans, both from established carmakers and from tech rivals like Tesla – whose CEO Elon Musk calls Apple’s interest in the car business, an “open secret.” It has also moved a number of its own senior execs over to Project Titan.

And one of those is apparently handing in his notice. According to various reports, Steve Zadesky, a 16-year Apple veteran who helped develop the iPhone and iPod, plans to leave, though it isn’t clear precisely when.

That “may seem like a blow,” said Akshay Anand, an analyst with Kelley Blue Book, but “the reality is Apple has enough money and potential to bring in almost anyone they desire.” His departure, Anand added, “shouldn’t railroad Apple’s efforts.”

(GM opens its pocketbook to enter car- and ride-sharing world. Click Here for the story.)

It’s unclear why Zadesky is leaving – or whether that departure is linked to a separate report out of Silicon Valley indicating that Jony Ive, Apple’s influential design director, isn’t happy with the way Project Titan is going.

Another veteran linked to the development of the iPhone, as well as the newer Apple Watch, Ive reportedly “expressed his displeasure” with the project Apple’s car program has so far made, according to the well-placed AppleInsider.

The publication also indicated that there is now a hiring freeze in place for Project Titan.

The Faraday Future FF Zero1 concept.

Exactly what Apple is working on is uncertain. And that has triggered a blast of rumors. Some speculation centers around a possible alliance with BMW, possibly linking Apple to the Bavarian maker’s own “i” brand which focuses on battery-based vehicles such as the i3 and i8.

There had also been some speculation Apple might be tying up with the Chinese-led group behind another high-tech start-up, Faraday Future. That upstart carmaker made its official debut during the Consumer Electronics Show earlier this month. And though it is about to break ground on a $1 billion assembly plant near Las Vegas it has so far refused to disclose key details about its investors or what it plans to bring to market within the next two years.

(Click Here for more on Faraday Future.)

Apple is believed to be working on an advanced vehicle that would combine electric propulsion and autonomous driving. Rival Google, meanwhile, has taken a lead in self-driving technology. It has said it does not plan to build cars on its own but has refused to discuss how it would go to market, including rumors of a possible alliance with Ford Motor Co.

(For more on Google’s plans, Click Here.)