South Korea’s Hyundai Motor Co. said on Friday that it is in early talks with Apple. Prior to this, a domestic broadcaster said that the two companies are discussing cooperation between electric vehicles and batteries, causing Hyundai’s stock 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.
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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 Motor said in a statement: “Apple and Hyundai are in discussions, but they are still in the early stages and have not yet made any decisions.”
In a subsequent regulatory document released, the automaker stated that it is “in the process of obtaining cooperation requests from multiple companies for the joint development of autonomous electric vehicles,” but did not disclose any of them.
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Apple declined to comment.
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, laying 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, is it a good strategy for automakers like Apple’s Foxconn,” he added. He was referring to the supply contract between the Taiwanese contract manufacturer and Apple on the iPhone.
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) labor costs are much higher than modern cars, and modern cars usually play an important role in car production.”
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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.
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.
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%, a seven-year high of 255,000 won, while the share price of auto parts maker Hyundai Mobis Co., Ltd. rose nearly 30%. Kia shares have risen about 14%.
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Battery manufacturers have also made progress, with SK Innovation increasing by 7%. As of 0336 GMT, the broader KOSPI market has risen 2.8%.
(Reporting by Heekyong Yang and Hyunjoo Jin in Seoul, Stephen Nellis in San Francisco; Editing by Sayantani Ghosh and Kenneth Maxwell)