Reports surfaced a month ago that Hyundai and Apple were talking about working together to build an electric car. Shortly afterward, Hyundai started backpedaling, saying it is in preliminary talks with several companies about possible future collaborations. That certainly makes sense, since the EV revolution sparked by Elon Musk and Tesla is rapidly gaining momentum. Fundamental changes in the auto industry are afoot as established manufacturers try to figure out how to avoid being swept away by the sea change taking place in their industry.
Last week, Reuters reported that top management at Hyundai is in a quandary about how to proceed with a relationship with Apple. It does not want to become merely an assembler of cars for other companies — a business model that has worked well for Magna, which manufacturers vehicles for Jaguar, Toyota, and others at factories around the world. “We are agonizing over how to do it, whether it is good to do it or not,” a Hyundai executive told Reuters. “We are not a company which manufactures cars for others. It is not like working with Apple would always produce great results.”
An anonymous source added that Hyundai and Apple have actually been going back and forth about a potential collaboration since 2018 when Alexander Hitzinger was in charge of Apple’s Project Titan project. Hitzinger now works for Volkswagen. The source claimed those talks stalled because Hyundai was reluctant to work with outsiders. “It is really difficult (for Hyundai) to open up,” he told Reuters, then added Hyundai would probably have to replace some senior executives if any partnership with Apple is to come to fruition. “Apple is the boss. They do their marketing, they do their products, they do their brand. Hyundai is also the boss. That does not really work.”
Another source at Hyundai told Reuters, “Tech firms like Google and Apple want us to be like Foxconn. A cooperation may initially help raise the brand image of Hyundai or Kia. But in the mid or longer term, we will just provide shells for the cars, and Apple would do the brains.”
Apple/Hyundai Talks Confirmed
A report by Apple Insider this week says TF Securities analyst Ming-chi Kuo has confirmed reports that Apple and Hyundai are working together on an electric car and that it will be based on Hyundai’s E-GMP platform. That chassis is said to have a range of up to 310 miles and can recharge to 80% capacity in 18 minutes using a DC fast charger. Unveiled in December, E-GMP is a dedicated battery electric vehicle platform powered by either one or two motors. It features a five link rear suspension for excellent ride dynamics and integrates the drive axle, battery cells, charging system, suspension, brakes and other rolling chassis systems into the platform. The first car built on the E-GMP platform will be the Hyundai Ioniq 5, followed soon after by sleek, ultra-sexy Ioniq 6.
Kuo thinks because EVs contain up to 50 times more parts than a smartphone, Apple will need to rely on existing automakers if it hopes to create a functional car on time. Trying to build its own supply chain will take too long, he says. “Apple’s deep collaboration with current automakers who have extensive development, production, and qualification experience will significantly shorten the Apple Car development time and create a time-to-market advantage,” Kuo writes in a research note. “We believe that Apple will leverage current automakers’ resources and focus on self driving hardware and software, semiconductors, battery related technologies, form factor and internal space designs, innovative user experience, and the integration with Apple’s existing ecosystem.”
Kuo claims that the first Apple car will be produced together with Hyundai, but collaborations with GM and/or PSA Group are also a possibility. Hyundai is said to be “taking the lead in component design and production” on the first car, while its smaller subsidiary Kia will be responsible for producing vehicles in the US. Kia reportedly has excess manufacturing capacity at its factory in Alabama.
Kuo does not anticipate a so-called “Apple Car” will be in production until 2025 at the earliest. He says Apple will likely market the vehicle as a “very high-end” model, or “significantly higher” than a standard electric vehicle.That could put it in direct competition with the recently refreshed Tesla Model S and the soon to arrive Mercedes EQS, as well as the Lucid Air. All three companies have chosen to start at the top of the market and work their way down to mass market vehicles, with Tesla far ahead in that process.
Cognitive Dissonance In High Places
The cognitive dissonance with the Hyundai boardroom about whether it wants to work with other companies like Apple is something that will define the auto industry going forward. Hyundai, like Tesla, is a vertically integrated company that designs and manufacturers most of the components for its automobile. Its corporate culture is not built on working with others.
Most current automakers will face similar choices in the years to come as the EV revolution sweeps through the industry. What Hyundai must decide is whether working with Apple will pay dividends in the marketplace and burnish its luster as an automaker or relegate it to little more than assembler status. For the record, Foxconn has made billions of dollars as an assembler and supplier for Apple. Hyundai could profit handsomely as well. It’s a tough call and it will be interesting to see which direction Hyundai chooses to go.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica Holiday Wish Book
Our Latest EVObsession Video
CleanTechnica uses affiliate links. See our policy here.