SEOUL (Reuters) -Hyundai Motor Co., of South Korea, said on Friday that it was in initial talks with Apple, after local media reported that companies were discussing a link between electric cars and batteries, which led to Hyundai shares would increase by 25%.
The report comes weeks after Reuters reported that Apple was advancing with car technology and wanted to produce a passenger vehicle that could include its own advanced battery technology as early as 2024.
On Friday earlier, Korea Economic Daily TV said the iPhone maker and Hyundai were in talks to develop autonomous electric vehicles by 2027 and develop batteries in U.S. factories operated by Hyundai or its subsidiary Kia Motors Corp. The station did not cite sources.
“Apple and Hyundai are under discussion, but as it is in the early stages, nothing has been decided,” Hyundai said in a statement. He did not say what the talks were about and omitted a reference in an earlier statement that Apple was talking to other global carmakers as well as Hyundai.
In a regulatory dossier issued later, the manufacturer said it was “receiving requests for cooperation for the joint development of autonomous electric vehicles from several companies,” without identifying any of them.
Apple declined to comment. The iPhone maker is known to keep product plans tight.
An Apple-branded car could be a big challenge for the leader in the electric vehicle (EV) market, Tesla Inc. It is still unclear who would ride this car, but analysts have said they expect the company to trust a manufacturing partner.
“We continue to firmly believe that Apple is finally announcing a strategic electric vehicle partnership in 2021 that lays the groundwork for entering the growing electric vehicle space,” Wedbush analysts said in a note.
LOWER COSTS
Hyundai and Apple are already working together on CarPlay, Apple’s software for connecting iPhones to a variety of vehicles.
“Apple has outsourced car production to Hyundai makes sense, because (the Korean company) is known for its quality,” said Jeong Yun-woo, a former Hyundai designer and UNIST professor in South Korea.
“But I’m not sure if it’s a good strategy for carmakers to be like Apple’s Foxconn, because carmakers face the risk of losing control of tech companies,” he said. add, in reference to the Taiwanese chip maker’s supply contract with Apple on iPhones. .
Analysts said Apple might be interested in using Hyundai’s electric car platform and facilities to reduce vehicle development and manufacturing costs.
“Apple might see Hyundai as an ideal partner, because when it comes to American legacy carmakers, they all have strong unions, which Apple would like to avoid,” said Kevin Yoo, an analyst at EBEST Investment & Securities.
“In addition, the cost of labor (old American automakers) is much higher than that of Hyundai, which often plays an important role when it comes to car production.”
EXPANSION OF THREATS
The link with Apple would be a major boost for Hyundai, whose global sales fell more than 15% last year as the pandemic weighed on demand. Friday’s stock price hike added nearly $ 8 billion to Hyundai’s market value.
Hyundai, a proponent of rival cars with hydrogen fuel cells, has recently increased its bets on battery-powered electric cars, an action well received by investors who have seen Tesla’s recent success.
The South Korean company, which comes from 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. year.
In 2019, Hyundai and auto parts supplier Aptiv launched a $ 4 billion company to develop auto-driving technologies, calling it Motional. Last month, the firm Lyft and Motional announced that it would launch a robot taxi service in the United States from several cities in 2023.
Hyundai has no dedicated electric car factories in the United States and may need to obtain consent from its powerful union in South Korea if it tries to build electric vehicles abroad, analysts said.
It is not known if Apple is in talks with other vehicle manufacturers.
Japanese manufacturer Honda Motor has not held talks with the iPhone maker, a spokesman told Reuters. The biggest rival, Toyota Motor Corp, said it does not comment on speculation, as does Foxconn.
Shares of Hyundai Motor jumped to 24.8%, reaching a more than seven-year high of 255,000 won, before closing at 19%. Auto parts maker Hyundai Mobis Co. Ltd ended the session up 18% more, while Kia shares jumped 8.4%.
Battery manufacturers also gained ground, with SK Innovation closing at 7.6%. The wider KOSPI market closed up 3.97%.
Reports of Heekyong Yang and Hyunjoo Jin in Seoul, Stephen Nellis in San Francisco; additional reports from Yimou Lee in Taipei and Eimi Yamamitsu in Tokyo; Editing by Sayantani Ghosh, Kenneth Maxwell and Kim Coghill