Hyundai Is Talking With Apple About Building An Electric Car
A few days ago in another story on CleanTechnica, I speculated about which of today’s car companies would still be around in 2030. The list will probably be short. Tesla, Volkswagen, and Mercedes, certainly. I also would put Hyundai on the list. Why? Because the South Korean company is open to innovation. It has made investments in Canoo and Arrival — two startups that plan to bring new kinds of electric vehicles to market. And now the rumor mill is swirling with reports that Hyundai is in preliminary talks with Apple.
What the two companies are talking about is anybody’s guess. Few details have been made public. What we do know is that Apple has been threatening to jump into the electric car game for 5 years now. In December, the story broke that its on again/off again Project Titan was back on.
Based on a story in Korea Economic Daily, CNBC is reporting that Apple approached Hyundai about working together and Hyundai is reviewing Apple’s proposal. The Korean report said electric vehicle production and battery development were included in the proposal. Potentially, a vehicle resulting from a collaboration between the two companies could go on sale in 2027. Hyundai’s stock immediately soared by 19%, which goes to show you how rational most investors are.
A spokesperson for Hyundai Motor told CNBC, “We understand that Apple is in discussion with a variety of global automakers, including Hyundai Motor. As the discussion is at its early stage, nothing has been decided.” Later, Hyundai issued a decidedly tepid statement saying, “We’ve been receiving requests of potential cooperation from diverse companies regarding development of autonomous driving EVs, but no decisions have been made as discussions are in early stage.”
Whether or not Apple is finally ready to pull the trigger on building an electric vehicle is hard to say. The company is famously tight lipped about its future plans. Analysts Daniel Ives and Strecker Backe from Wedbush Securities told CNBC, “Over the last six years we have seen many twists and turns in Apple’s automotive ambitions. Project Titan as its been known within the halls of Cupertino has ultimately been significantly scaled down from its initial ramp a few years ago and now appears to be front and center again on the radar screen of the Street.”
The two analysts said there is only a 35% to 40% chance of Apple launching its own stand alone car due to the “Herculean-like auto production capabilities, battery technology ramp, financial model implications, and regulatory hurdles involved in such a game changing initiative. In addition, on the autonomous front and given safety and regulatory issues, we would see a longer time frame if Apple ultimately heads down this path especially given the cautious DNA of Cook & Co. in launching new products.” They added that partnerships are “likely the first step” for Apple as it moves into the automotive space.
Jeong Yun-woo is a former designer at Hyundai and is now a professor at UNIST in South Korea. He tells Autoblog, “Apple outsourcing car production to Hyundai makes sense, because it is known for quality. 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.” Foxconn has just made a major investment in Chinese EV startup Byton.
Kevin Yoo, an analyst at eBEST Investment & Securities adds, “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. Moreover, their labor cost is much higher than that of Hyundai, which often plays a big role when it comes to car production.”
Market Convergence
Apple is the envy of the world when it comes to designing electronic products that are visually stunning and represent the state of the art from an engineering point of view. If it ever put its shoulder to the wheel and actually made a production ready vehicle, it would be of the highest quality and be the beneficiary of instantaneous brand recognition. The question is whether Apple should do this. Judging by the fits and starts that have accompanied its Project Titan program so far, it seems clear even company insiders don’t know the answer to that question.
In a recent article, we reported on the fantasmagorical new touchscreens coming from Mercedes and Cadillac — devices that will accentuate how automobiles are becoming more like computers with wheels. Perhaps a partnership between a tech company and an auto manufacturer is a trend we will see more of in the years to come. Will there ever be an Apple car? “We’ll see,” said the Zen master.
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