Hyundai-Apple partnership is in early phase of discussion for the development of the iPhone maker's self-driving car, which will be released in 2027, three years later the rumored 2024 target.
After local news outlet Korea Economic Daily reported the rumored tie-up, Hyundai Motor shares soared by 20%. It was reported that Apple was the one to suggest the tie-up, sending the proposal to the South Korean carmaker, which is said to be reviewing the terms.
Hyundai-Apple partnership in early talks
According to CNBC, the possible Hyundai-Apple tie-up will focus on developing a self-driving car. According to the proposal, Hyundai will handle both the battery development and vehicle production for the Apple car. The target release is said to be in 2027, unlike the earlier rumors of a 2024 release.
Back in December, Apple is said to be eyeing to launch its own self-driving car in three years, almost a decade after the initial thought of designing the vehicle from scratch surfaced in 2014.
Known as the Project Titan, Apple car development has encountered numerous ups and downs, including the layoff of 190 employees in 2019. However, there is still no concrete plans on who would build the Apple car.
A Hyundai Motor representative told CNBC that "nothing has been decided" yet as the discussion is still on the early stage. The representative also noted that Apple is also having talks with different automakers across the globe, and Hyundai Motor is just one of them.
Meanwhile, Apple has not yet released a statement about the report.
Read also: Apple Supplier Foxconn to Help Chinese Startup Produce Its First Electric SUV
Hyundai Motor stocks surge after Apple tie-up rumors
Although there is still no official statement yet from either Apple or Hyundai, the South Korean company and its affiliates are gaining much from these rumors.
On Jan. 7, Hyundai Motor stock closed the market with 20.87% increase, Hyundai Mobis gained 23.15%, Hyundai Glovis with 3.51% rise, and Hyundai Wia was up 21.47%. Also, shares of Kia Motors, a Hyundai affiliate and the second largest South Korean car manufacturer, also surged by 9.84%.
However, known Apple analyst Ming-Chi Kuo said the stock market hype on companies that are rumored to forge tie-ups with the iPhone maker to supply Apple car parts is only based on speculations. After all, nothing has been developed yet about six years since Apple car rumors surfaced.
Kuo also said the Apple car may even wait until 2028 or later before it finally reach the market.
Other possible Apple car supplier
Meanwhile, Automotive News suggested that if Apple is indeed serious with its plan to launch its own vehicle, it is best for the company to outsource a company to build the car. this is the same as the iPhone, in which Apple designs the smart phone and provides the operating system while Foxconn assembles all components to build the handset.
If the Hyundai deal would not materialize, Evercore ISI analyst Chris McNally suggested that Apple should also consider forging a contract with Canadian company, Magna International Inc., the world's third biggest auto supplier. In 2019, it generated almost $40 billion revenue from products like transmissions, mirrors, seating, and vehicle cameras. However, the company is now has $21 billion market value after its shares skyrocketed since March.
Meanwhile, the Graz, Austria factory of its manufacturing subsidiary, Magna Steyr, builds premium vehicles such as the electric Jaguar I-Pace, the Toyota Supra, Mercedes-Benz G-Class, and the BMW Z4 sportscar.
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Written by CJ Robles