SEOUL (Reuters) – South Korea’s Hyundai Motor Co. said on Friday it was in early talks with Apple after a national broadcaster said companies were discussing a link between electric cars and batteries, which led to actions of Hyundai increased 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 for its report.
“Apple and Hyundai are under discussion, but they are at an early stage and nothing has been decided,” Hyundai said in a statement without saying what it was all about.
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.
An Apple-branded car could be a big challenge for Tesla Inc.’s electric vehicle (EV) market leader. It is still unclear who would ride this car, but analysts have said they expect the company to rely on a manufacturing partner to build vehicles.
“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 vehicles from various automakers.
“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 contract 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 a strong union, 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 big boost for the carmaker, whose global sales fell more than 15% last year as the pandemic weighed on demand.
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.
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.
Shares of Hyundai Motor rose to 24.8%, with a more than seven-year high of 255,000 won, while spare parts manufacturer Hyundai Mobis Co Ltd jumped nearly 30%. Shares of Kia jumped 14%.
Battery manufacturers also gained ground, with SK Innovation 7%. The broader KOSPI market rose 2.8% from 0336 GMT.
Reports of Heekyong Yang and Hyunjoo Jin in Seoul and Stephen Nellis in San Francisco; Editing by Sayantani Ghosh and Kenneth Maxwell