Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Hyundai says in early talks with Apple after electric vehicle tie-up report

Stock MarketsJan 08, 2021 06:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Car manufacturers display their wares on the show floor of the North American International Auto Show in Detroit 2/2

By Heekyong Yang and Hyunjoo Jin

SEOUL (Reuters) -South Korea's Hyundai Motor Co said on Friday it was in early talks with Apple (NASDAQ:AAPL), after local media reported the firms were discussing an electric car and battery tie-up, sending Hyundai shares surging 25%.

The report comes weeks after Reuters reported that Apple was moving forward with self-driving car technology and was aiming to produce a passenger vehicle that could include its own breakthrough battery technology as early as 2024.

Earlier on Friday, Korea Economic Daily TV said the iPhone maker and Hyundai were in discussions to develop self-driving electric vehicles by 2027 and develop batteries at U.S. factories operated by either Hyundai or its affiliate Kia Motors Corp. The broadcaster didn't cite sources.

"Apple and Hyundai are in discussion, but as it is early stage, nothing has been decided," Hyundai said in a statement. It didn't say what the talks were about and omitted a reference in an earlier statement to Apple being in discussions with other global automakers as well as Hyundai.

In a regulatory filing issued later, the automaker said it was "getting requests for cooperation on joint development of autonomous electric vehicles from various companies", without identifying any of them.

Apple declined to comment. The iPhone maker is known to keep product plans under tight wraps.

An Apple-branded car could be a big challenge to electric vehicle (EV) market leader Tesla (NASDAQ:TSLA) Inc. It remains unclear who would assemble such a car, but analysts have said they expect the company to rely on a manufacturing partner.

"We continue to strongly believe Apple ultimately announces an EV strategic partnership in 2021 that lays the groundwork to enter the burgeoning EV space," Wedbush analysts said in a note.

LOWER COSTS

Hyundai and Apple already work together on CarPlay, Apple's software for connecting iPhones to a variety of vehicles.

"Apple outsourcing car production to Hyundai makes sense, because (the Korean firm) is known for quality," said Jeong Yun-woo, a former designer at Hyundai and a professor at UNIST in South Korea.

"But I'm not sure whether it is a good strategy for automakers to be like the Foxconn of Apple as automakers face risks of losing control to tech firms," he added, referring to the Taiwanese contract chip manufacturer's supply contract with Apple on iPhones.

Analysts said Apple may be interested in using Hyundai's electric car platform and facilities to cut costs to develop and make vehicles.

"Apple could see Hyundai as an ideal partner, because when it comes to legacy U.S. automakers, they all have strong unions, which Apple would like to avoid," said Kevin Yoo, an analyst at eBEST Investment & Securities.

"Moreover, their (legacy U.S. automakers) labour cost is much higher than that of Hyundai, which often plays a big role when it comes to car production."

TIE-UP BOOST

A tie-up with Apple would be a major boost to Hyundai, whose global sales last year fell more than 15% as the pandemic took a toll on demand. Friday's share price surge added nearly $8 billion to Hyundai's market value.

A longtime champion of rival hydrogen fuel cell cars, Hyundai recently increased bets on battery-powered electric cars, a move welcomed by investors eyeing the recent success of Tesla.

The South Korean company, which sources 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 early this year.

In 2019, Hyundai and auto parts supplier Aptiv (NYSE:APTV) launched a $4 billion venture to develop self-driving technologies, naming it Motional. Last month, ride-hailing firm Lyft (NASDAQ:LYFT) and Motional said they would launch a multi-city U.S. robo-taxi service in 2023.

Hyundai does not have dedicated electric car factories in the United States and it may have to gain consent from its powerful union in South Korea were it to seek to build EVs overseas, analysts said.

It is not known whether Apple is in talks with other carmakers.

Japanese automaker Honda Motor has not held talks with the iPhone maker, a spokesman told Reuters. Bigger rivalToyota Motor Corp said it does not comment on speculation, as did Foxconn.

Shares in Hyundai Motor jumped as much as 24.8%, hitting a more than seven-year high of 255,000 won, before closing up 19%. Auto parts maker Hyundai Mobis Co Ltd ended the session 18% higher, while Kia shares jumped 8.4%.

Battery makers also gained ground, with SK Innovation closing up 7.6%. The broader KOSPI market closed up 3.97%.

Hyundai says in early talks with Apple after electric vehicle tie-up report
 

Related Articles

Italy confident in MPS deal in October - sources
Italy confident in MPS deal in October - sources By Reuters - Sep 24, 2021

By Giuseppe Fonte and Valentina Za ROME (Reuters) -Italy's Treasury is confident it will be able to announce a deal to sell selected parts of state-owned bank Monte dei Paschi...

2 Cheap Growth Stocks to Snatch Up Now
2 Cheap Growth Stocks to Snatch Up Now By StockNews - Sep 24, 2021

Growth stocks are gaining momentum amid bullish market sentiment and the Fed’s signal that it will keep supporting the economy for now. We believe the continuing...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email