SEOUL (Reuters) – Hyundai Motor Co., South Korea, said on Friday it was in early talks with Apple after a local broadcaster said the companies were discussing an electric car and battery connection, raising Hyundai shares by 25% has.
The report comes weeks after Reuters reported that Apple is moving forward with self-driving car technology and aims to manufacture a passenger vehicle as early as 2024 that could include its own breakthrough battery technology.
Earlier Friday, Korea Economic Daily TV said the iPhone maker and Hyundai were in talks to develop self-driving electric vehicles and batteries by 2027 at U.S. factories run by Hyundai or its subsidiary Kia Motors Corp. The broadcaster did not name any sources. for his report.
“Apple and Hyundai are in talks, but they are at an early stage and nothing has been decided,” Hyundai said in a statement without saying what the talks were about.
In a regulatory submission later issued, the automaker said it was “receiving requests for cooperation on the joint development of autonomous electric vehicles from different companies”, without identifying any of them.
Apple declined to comment.
An Apple car could be a major challenge for Tesla Inc., the market leader in electric vehicles (EVs). It remains unclear who will put together such a car, but analysts said they expect the company to rely on a manufacturing partner to build vehicles.
“We still believe that Apple will finally announce an EV strategic partnership in 2021 that lays the groundwork for entering the emerging EV space,” Wedbush analysts said in a note.
LOW COST
Hyundai and Apple are already working together on CarPlay, Apple’s software to connect iPhones to vehicles from different car manufacturers.
“Apple outsourced car production to Hyundai because it (the Korean firm) is known for quality,” said Jeong Yun-woo, a former Hyundai designer and a professor at UNIST in South Korea.
“But I do not know if it’s a good strategy for automakers to be like Apple’s Foxconn, as automakers are risking losing control of technology companies,” he said.
According to analysts, Apple may be interested in using Hyundai’s electric car platform and facilities to reduce costs for developing and manufacturing vehicles.
“Apple may consider Hyundai an ideal partner, because when it comes to US automakers, they all have a strong union, which Apple would like to avoid,” said Kevin Yoo, an analyst at eBEST Investment & Securities.
“In addition, their (legacy American car manufacturers) labor costs are much higher than those of Hyundai, which often plays a major role in car production.”
INDOOR CLEARANCE
A partnership with Apple would be a big boost for the carmaker, whose global sales fell by more than 15% last year as the pandemic strongly demanded demand.
Hyundai is a longtime champion of competing hydrogen fuel cell cars and recently increased the bet on electric cars with batteries, which is welcomed by investors due to the recent success of Tesla.
The South Korean company, which acquires batteries from SK Innovation Co Ltd and LG Chem Ltd and others, is expected to launch its first car based on a dedicated electric car platform known as E-GMP earlier this year.
Hyundai does not have dedicated electric car factories in the United States, and it may need to get permission from its powerful union in South Korea if it tries to build EVs abroad, analysts said.
The shares in Hyundai Motor rose by 24.8% and reached a high of more than seven years of 255 000 won, while the car parts manufacturer Hyundai Mobis Co Ltd jumped by almost 30%. Kia shares rose about 14%.
Battery manufacturers also won ground, with SK Innovation up 7%. The broader KOSPI market rose by 2.8% from 0336 GMT.
Reporting by Heekyong Yang and Hyunjoo Jin in Seoul and Stephen Nellis in San Francisco; Edited by Sayantani Ghosh and Kenneth Maxwell