Apple Car: what’s going on?
Hello dear readers of Tecnogalaxy, today we will talk about Apple’s contacts with Hyundai that have broken for the Apple Car project and what will happen to the car made in Cupertino.
South Korea’s Hyundai Motor Co recently reported that it is not now in talks with Apple Inc about autonomous electric cars, just a month after confirming initial talks with the tech giant, sending the car company’s stock to skid.
The damage following the news of Apple Car
By cancelling $3 billion from its market value, Hyundai’s shares slipped by 6.2%. The shares of its subsidiary Kia Corp, which had been identified by local media as Apple’s likely operating partner, plummeted by 15%, a $5.5 billion strike.
The announcement drops the curtain on weeks of internal divisions at Hyundai Motor Co Group, parent of both car manufacturers, about the potential link, with some executives who have raised concerns about becoming a contract manufacturer for the US tech giant in a bond reminiscent of the role of electronics company Foxconn in making devices for Apple like the iPhone.
“We are receiving requests for cooperation in the joint development of autonomous electric vehicles from various companies, but they are at an early stage and nothing has been decided,” said the car manufacturers, in accordance with stock market rules that require regular updates to investors regarding market items.
“We are not having talks with Apple about developing autonomous vehicles”.
Kia’s shares had jumped 61% since Hyundai initially confirmed a local media report in early January that Apple and Hyundai were in discussion about developing autonomous electric vehicles by 2027 and developing batteries in factories managed by Hyundai or Kia.
“Apple and Hyundai are in discussion, but since this is an early stage, nothing was decided,” said Hyundai, before making any subsequent statements that removed all of Apple’s mentions, but he said that Hyundai was receiving other requests for cooperation for electric cars.
One step away from the deal
Just last week, it was reported that a deal was close to being finalized. A South Korean report said the two companies were ready to sign the agreement on February 17.
Hyundai is traditionally known for its reluctance to work with outsiders, producing engines, transmissions and even its own in-house steel in a vertically integrated supply chain as the second largest conglomerate of South Korea.
Although the actions of Kia and Hyundai have increased to the news of the talks, the internal opposition to becoming an Apple contract producer has been considerable, according to people who are familiar with the issue.
“We’re getting excited about how to do it, whether it’s good to do it or not,” said a Hyundai executive aware of the internal discussions. “We are not a company that produces cars for others,” he said, speaking on condition of anonymity.
Apple and Hyundai began the first talks on an automotive partnership as early as 2018, another person familiar with the issue. But progress was hampered by the South Korean automaker’s reticence to work with outsiders, the person said.
In December, Apple was going ahead with autonomous car technology and aimed to produce a passenger vehicle that could include its own innovative battery technology as early as 2024.
The reasons for the rupture
Apple, known to keep product plans under strict confidentiality, never recognized talks with the automaker about vehicle construction, and was not immediately available for comment outside of working hours in the United States.
Analysts said the talks could have collapsed due to leaks from the media partnership plan, or Apple’s possible insistence that Hyundai’s role in any connection would be that of an equipment manufacturer, rather than a strategic partner.
“With plenty of news about the discussions between the two companies, which were supposed to be held to non-disclosure agreements, it would be uncomfortable,” said Kwon Soon-woo, an analyst at SK Securities.
Kevin Yoo, an analyst at eBEST Investment & Securities, said: “It seems clear that Hyundai Motor Group was not too pleased to deal with Apple … They made it clear that they do not want to be treated only as Apple vendors or manufacturers”.
That’s all about updates on Apple Car. To a next article!
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