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Hyundai Holding Early But Unspecified Talks With Apple, Local Media Claims The Two Discussing Electric Vehicles

Hyundai Holding Early But Unspecified Talks With Apple, Local Media Claims The Two Discussing Electric Vehicles
Following a telecast by a local broadcaster of South Korea that discussions were being held for a tie up about an electric car and car battery between the South Korean auto giant Hyundai Motor Co and the United States based iPhone maker Apple Inc, the auto giant confirmed that it was in early but unspecified talks with Apple. The report had previously sent Hyundai’s stocks surging by as much as 24 per cent.
“Apple and Hyundai are in discussions but they are at an early stage and nothing has been decided,” Hyundai said in a statement without saying what the talks were about.
No comment on the issue was available from Apple.
However the South Korean auto maker later said in a regulatory filing issued later that it was “getting requests for cooperation on joint development of autonomous electric vehicles from various companies”. The company however did not identify any of them.
These comments were made after the surge in the shares of Hyundai following the report by the Korea Economic Daily TV in which the broadcaster claimed that Hyundai and the American iPhone maker were in negotiations and the two parties expected to jointly develop batteries at the US production units operated either by the South Korean car maker or its affiliate Kia Motors Corp. The television report however did not name the sources of the report.
The two companies already have a collaboration called CarPlay which is Apple’s software that can be used for connecting iPhones to vehicles from a variety of automakers.
Apple is pressing forward with self-driving car technology, news agency Reuters reported in December, and added that the company aims to launch a a passenger vehicle as early as 2024 which could include its own breakthrough battery technology.
“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.
“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 manufacturer’s supply contract with the iPhone maker.
Apple would gain in terms of cutting down costs of development and making of vehicles from the partnership with Hyundai since ut would have access to and would be able to make use of the electric car platform and facilities of Hyundai, said analysts.
“Apple could see Hyundai as an ideal partner, because when it comes to legacy U.S. automakers, they all have strong union, 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.”
With the broadcasting of the news, there as surge in shares in Hyundai Motor by much as much as 23.8 per cent as the stocks hit a more than seven year high of 255,000 won. There was also a 30 per cent jump in the stocks of auto parts maker Hyundai Mobis Co Ltd.

Christopher J. Mitchell

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