SEOUL (Reuters) – South Korean Hyundai Motor Co said on Friday it was in talks with Apple after a local operator said companies were discussing an electric car and connecting batteries, sending shares of Hyundai up 25%.
The report comes weeks after Reuters reported that Apple is moving forward with self-driving car technology and aims to produce a passenger vehicle that could include its own battery-breaking technology as early as 2024.
Earlier on Friday, Korea Economic Daily TV said the iPhone maker and Hyundai were in talks to develop self-driving electric vehicles by 2027 and to develop batteries in U.S. factories operated by Hyundai or its related Kia Motors Corp. . The Contractor does not cite sources for its report.
“Apple and Hyundai are in talks, but they are at an early stage and nothing has been decided,”
In a regulatory statement issued later, the carmaker said it was “receiving requests for cooperation in the joint development of autonomous electric vehicles from different companies”, without identifying any of them.
Apple declined to comment.
The Apple brand can be a big challenge for the market leader in electric vehicles (EV) Tesla Inc. It remains unclear who would assemble such a car, but analysts say they expect the company to rely on a manufacturing partner to produce vehicles.
“We continue to firmly believe that Apple will eventually announce a strategic partnership for electric vehicles in 2021, laying the groundwork for entering the thriving space of electric vehicles,” Wedbush analysts said in a note.
Hyundai and Apple are already working together on CarPlay, Apple’s software for connecting iPhones to vehicles from various automakers.
“Apple assigns Hyundai to outsourcing cars because (the Korean company) is known for its quality,” said Jeong Yun-woo, a former designer at Hyundai and a professor at UNIST in South Korea.
“But I’m not sure if it’s a good strategy for carmakers to be like Apple’s Foxconn, as carmakers face the risk of losing control of technology companies,” he added, citing Taiwan’s supply contract with Apple. Apple for iPhone on iPhone.
Analysts say Apple may be interested in using Hyundai’s platform and equipment for electric cars to reduce the cost of developing and manufacturing vehicles.
“Apple may view Hyundai as an ideal partner because when it comes to hereditary American carmakers, they all have a strong alliance that Apple would like to avoid,” said Kevin Yo, an analyst at eBEST Investment & Securities.
“In addition, their labor costs (hereditary American manufacturers) are much higher than those of Hyundai, which often plays a big role when it comes to car production.”
The relationship with Apple will be a major boost for the carmaker, whose global sales fell by more than 15% last year as the pandemic claimed casualties on demand.
A longtime champion of rival cars with hydrogen fuel cells, Hyundai recently increased its stakes on battery-powered electric cars, a move welcomed by investors watching Tesla’s recent success.
The South Korean company, which supplies batteries from SK Innovation Co Ltd and LG Chem Ltd and others, is expected to launch its first car based on a specialized electric car platform known as E-GMP earlier this year.
Hyundai does not have specialized electric car plants in the United States and may need to obtain approval from its powerful alliance in South Korea if it seeks to build electric cars abroad, analysts say.
Shares in Hyundai Motor jumped 24.8%, reaching a seven-year high of 255,000, while auto parts maker Hyundai Mobis Co Ltd jumped nearly 30%. Shares of Kia jumped about 14%.
Battery manufacturers have also established themselves, with SK Innovation growing by 7%. KOSPI’s broader market grew 2.8% to 0336 GMT.
Report by Heekyong Yang and Hyunjoo Jin in Seoul and Stephen Nellis in San Francisco; Edited by Sayantani Ghosh and Kenneth Maxwell