South Korea Hyundai Motor Company PJSC On Friday, she said she was in early talks with her an Apple After the local broadcaster said the companies were discussing connecting the electric car and the battery, causing Hyundai shares to rise 25%.
The report comes weeks after Reuters announced that Apple is pressing ahead with self-driving car technology and was aiming to produce a passenger car that could include its own battery technology as early as 2024.
Earlier on Friday, Korea Economic Daily TV said the iPhone maker and Hyundai were in discussions to develop electric autonomous cars by 2027 and to develop batteries in US factories run by Hyundai or its affiliate Kia Motors Corp. The broadcaster did not cite sources for her report.
“Apple and Hyundai are holding discussions, but they are at an early stage and nothing has been decided,” Hyundai said in a statement, without disclosing the reason for the talks.
In a later regulatory file, the automaker said it was “receiving requests for cooperation in the joint development of electric autonomous vehicles from various companies,” without specifying which one.
Apple declined to comment.
The Apple-branded car could pose a huge challenge to Tesla Inc, market leader in electric cars. It remains unclear who will collect such a vehicle, but analysts have said they expect the company to rely on a manufacturing partner to build the cars.
“We still firmly believe that Apple will ultimately announce a strategic partnership for electric cars in 2021 that will lay the groundwork for entering the booming electric vehicle field,” Wedbush analysts said in a note.
Hyundai and Apple are already working together on CarPlay, Apple’s program to connect iPhones to vehicles from a variety of automakers.
“It makes sense for Apple to outsource car production to Hyundai because (the Korean company) is known for quality,” said Jeong Yun-Woo, a former Hyundai designer and professor at UNIST in South Korea.
He added, “But I am not sure whether it is a good strategy for the automakers to be like Foxconn at Apple, as car makers face risks of losing control of technology companies,” referring to the manufacturer’s supply contract for the Taiwanese contract with Apple on iPhones.
Analysts said Apple may be interested in using Hyundai’s electric vehicle platform and facilities to reduce car development and manufacturing costs.
“Apple could see Hyundai as an ideal partner, because when it comes to the old American automakers, they all have a strong union, which is what Apple would like to avoid,” said Kevin Yu, analyst at eBEST Investment & Securities.
“Moreover, the labor cost (of the old American automakers) is much higher than that of Hyundai, which often plays a big role when it comes to producing cars.”
The link with Apple would be a big boost for the automaker, whose global sales fell more than 15% last year as the pandemic affected demand.
Hyundai, the champion of rival hydrogen fuel cell cars, recently raised bets on battery-powered electric cars, a move welcomed by investors looking forward to Tesla’s recent success.
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The South Korean company, which acquires the batteries from SK Innovation Co Ltd, LG Chem Ltd and others, is expected to launch its first vehicle based on a dedicated electric vehicle platform known as E-GMP early this year.
Analysts said Hyundai does not have dedicated electric vehicle plants in the United States, and it may have to seek approval from its powerful South Korea association if it seeks to build electric cars abroad.
Hyundai Motor Co. shares jumped 24.8 percent, reaching their highest level in more than seven years at 255,000 won, while auto parts maker Hyundai Mobis jumped 30 percent. Kia shares jumped 14%.
Battery manufacturers also gained ground, with SK Innovation up 7%. The broader Kospi market was up 2.8% by 0336 GMT.
(Prepared by Heekyong Yang and Hyunjoo Jin in Seoul, and Stephen Nellis in San Francisco; Editing by Sayantani Ghosh and Kenneth Maxwell)