Hyundai says in initial talks with Apple after electric vehicle tie-up report


SEOUL (Reuters) -South Korea’s Hyundai Motor Company said on Friday that it was in early talks with Apple, with local media reporting that it was discussing an electric car and battery tie-up, in which Hyundai shares 25% Were increased.

A few weeks after Reuters reported that Apple was moving ahead with self-driving car technology and was aiming to build a passenger vehicle that would include its own breakthrough battery technology by 2024 To be.

Earlier on Friday, the Korea Economic Daily TV said that the iPhone maker and Hyundai were in discussions to develop self-driving electric vehicles by 2027 and to develop batteries in American factories operated by Hyundai or its affiliate Kia Motors Corp. The broadcaster did not cite sources.

“Apple and Hyundai are in discussion, but as it is in its early stages, nothing has been decided,” Hyundai said in a statement. It did not reveal what the talks were about and an earlier statement from Apple omitted a reference that was in discussion with other global automakers as well as Hyundai.

In a regulatory filing released later, the automaker said it was “receiving requests for cooperation on joint development of autonomous electric vehicles from various companies”, without identifying any of them.

Apple declined to comment. The iPhone manufacturer is known for having product plans under tight wraps.

Apple-branded car electric vehicle (EV) market leader Tesla Inc. Can be a big challenge for It is not clear who will collect such a car, but analysts say they expect the company to rely on a manufacturing partner.

FILE PHOTO: The logo of Apple Inc is seen hanging at the entrance of the Apple Store on 5th Avenue in Manhattan, New York, US, October 16, 2019. REUTERS / Mike Seger / File Photo

Vesush analysts said in a note, “We strongly believe that Apple finally announces the EV strategic partnership in 2021, which does the ground work to enter the EV space.”

Lower costs

Hyundai and Apple already work together on CarPlay, Apple’s software for connecting iPhones to a wide variety of vehicles.

“Apple outsourcing car production to Hyundai makes sense, because 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’m not sure if this is a good strategy for automakers like Apple’s Foxconn, because automakers risk losing control over tech firms,” ​​he said, adding that the Taiwanese contract chipmaker’s supply contract with Apple on iPhones Referring to.

Analysts said Apple might be interested in developing Hyundai’s electric car platform and features and cutting costs to build vehicles.

Kevin Yau, an analyst at EBest Investment & Securities, said, “Apple can see Hyundai as an ideal partner, because when it comes to American automakers, they all have strong unions, which come from Apple. Would like to escape. “

In addition, their (heritage American automaker) labor costs are much higher than Hyundai’s, often when it comes to car production.

TIE-UP BOOST

An alliance with Apple would be a major boost for Hyundai, whose global sales fell more than 15% last year as the epidemic took a toll on demand. Hyundai’s market value increased nearly $ 8 billion in Friday’s share price.

A long-time champion of rival hydrogen fuel cell cars, Hyundai recently raised bets on battery-powered electric cars, a move welcomed by investors to monitor Tesla’s recent success.

The South Korean company, which carries 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 called E-GMP earlier this year.

In 2019, Hyundai and auto parts supplier Aptiv started a $ 4 billion venture to develop self-driving technologies, christened Motional. Last month, ride-hailing firm Lyft and Motional said they would start a multi-city US robo-taxi service in 2023.

Analysts say that Hyundai does not have dedicated electric car factories in the United States and may have to obtain consent from its powerful union in South Korea.

It is not known whether Apple is in talks with other carmakers.

Japanese automaker Honda Motor has not negotiated with the iPhone maker, a spokesperson told Reuters. Big rival Tyotata Motor Corp said it did not comment on speculation, as did Foxconn.

Shares of Hyundai Motor jumped 24.8%, crossing a seven-year high of more than 255,000,000 before closing at 19%. Auto parts maker Hyundai Mobis Company Ltd. was up 18%, while Kia’s stock jumped 8.4%.

Battery makers also acquired the ground, with SK Innovation closing up 7.6%. The broader KOSPI market closed up 3.97%.

Stephen Nellis in Seoul Reporting by Heeokong Yang and Hyunjou Jin in Seoul; Additional reporting by Yimou Li in Taipei and Imi Yamamitsu in Tokyo; Editing by Sayantani Ghosh, Kenneth Maxwell and Kim Coghill

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