SEOUL (Reuters)-South Korea’s Hyundai Motor Co. said on Friday that it is in early negotiations with Apple, after a domestic broadcaster said that the two companies were discussing electric vehicles and batteries, causing Hyundai’s share price to soar by 25%.
The report was released a few weeks after Reuters reported that Apple is promoting the development of self-driving car technology and plans to produce passenger cars in 2024 that may include its breakthrough battery technology.
Earlier on Friday, the Korea Economic Daily said that iPhone manufacturers and Hyundai Motors are discussing the development of self-driving electric cars by 2027, and developing batteries at Hyundai Motors or its subsidiary Kia Motors’ plant in the United States. Report for it.
Hyundai said in a statement: “Apple and Hyundai are in discussions, but because they are still in the early stages, there is no final conclusion.”
In the regulatory documents released later, the automaker did not mention Apple, but stated that it “is obtaining cooperation requests from multiple companies for the joint development of self-driving electric vehicles,” but did not find any of them.
Apple declined to comment.
Hyundai’s changes to the statement indicate that it may be more cautious about future communications about any potential partnerships with iPhone manufacturers. As we all know, iPhone manufacturers will pay close attention to product plans.
Apple-branded cars may pose a huge challenge to Tesla Inc., the leader in the electric vehicle (EV) market. It is not clear who will assemble the car, but analysts said they expect the company to rely on manufacturing partners to make the car.
Wedbush analysts said in a report: “We still firmly believe that Apple will finally announce the establishment of a strategic partnership for electric vehicles in 2021, which lays the foundation for entering the rapidly growing field of electric vehicles.”
Hyundai Motor and Apple have already collaborated on CarPlay, which is Apple’s software used to connect the iPhone to the vehicles of various automakers.
“It makes sense for Apple to outsource car production to Hyundai Motor, because (the Korean company) is known for its quality,” said Jeong Yun-woo, a former designer of Hyundai Motor and a professor at South Korea’s UNIST.
He added: “However, since automakers face the risk of losing control of technology companies, automakers are like Apple’s Foxconn. Is this a good strategy,” he added.
Analysts said that Apple may be interested in using modern electric vehicle platforms and facilities to reduce the cost of developing and manufacturing cars.
Kevin Yoo, an analyst at eBEST Investment & Securities, said: “Apple can regard Hyundai as an ideal partner because as far as traditional American automakers are concerned, they all have strong unions, which Apple wants to avoid.”
“In addition, their (traditional American automakers) have much higher labor costs than Hyundai Motors, which usually play an important role in car production.”
The cooperation with Apple will give the automaker a major boost. Due to the surge in demand caused by this epidemic, the company’s global sales fell by more than 15% last year. Friday’s stock price surge increased Hyundai’s market value by nearly $8 billion.
As the long-term champion of hydrogen fuel cell vehicles, Hyundai Motor has recently increased its bet on battery-powered electric vehicles. This move has attracted the attention of investors, who are concerned about Tesla’s recent success.
The South Korean company purchases batteries from companies such as SK Innovation Co Ltd and LG Chem Ltd, and is expected to launch its first car based on a dedicated electric vehicle platform, called E-GMP, early this year.
In 2019, Hyundai Motors and auto parts supplier Aptiv initiated a $4 billion venture investment to develop autonomous driving technology and named it Motional. Last month, ride-hailing companies Lyft and Motional said they would launch multi-city robotic taxi services in the United States in 2023.
Analysts say that Hyundai does not have a dedicated electric car factory in the United States. If it seeks to produce electric cars overseas, Hyundai may have to obtain the consent of its powerful South Korean union.
Hyundai Motor’s share price rose 24.8%, hitting a seven-year high of 255,000 won, and finally closed up 19%. Auto parts maker Hyundai Mobis Co Ltd closed up 18%, while Kia Motors shares rose 8.4%.
Battery manufacturers also gained some gains, with SK Innovation closing up 7.6%. The entire KOSPI market closed up 3.97%, and rose 4.3% during the session.
Yang Xiy and Kim Hyunjo report from Seoul, Stephen Nellis reports from San Francisco; Editing by Sayantani Ghosh and Kenneth Maxwell