Hyundai shares zoom 24%, likely to collab with Apple for electric cars
Hyundai Motor Co. recently revealed that they’re in talks with Apple for developing self-driving electric cars, emerging as the first auto-manufacturing partner for the technology company. After this news, the shares of Hyundai have jumped.
The shares surged by 24% after this announcement about their early-stage, unspecified talks with Apple concerning an electric car and battery tie-up. This surge of exactly, 28.3% hit a more than seven-year high of 255,000 won. Auto parts maker Hyundai Mobis Co Ltd jumped nearly 30%. Kia shares were raised by around 14%.
The South Korean manufacturer said, “Apple and Hyundai are in discussion, but as it is at an early stage, nothing has been decided.” Apple has refused to comment yet.
In a regulatory filing issued, the automaker said it was, “getting requests for cooperation on joint development of autonomous electric vehicles from various companies”, without naming any of them.
These comments surfaced after the Hyundai shares surged following a report by Korea Economic Daily TV that Apple and Hyundai were negotiating and expected to create batteries at U.S. factories operated by either Hyundai or its associate, Kia Motors Corp.
With the groundwork still at an early stage, Apple will at least take 5 years to launch an autonomous, electric vehicle, according to a source from Bloomberg News. One of their competitors in this field, Cupertino which is a California based company and doesn’t manufacture their own products, is waiting on deciding their potential auto-industry partners.
Although this isn’t a first-time collaboration between the two companies. They previously worked together on CarPlay which is Apple’s software for joining iPhones to vehicles from various automakers.
According to Reuters, Apple is acting on its self-driving technology and strives to produce a passenger vehicle in 2024 that could include its own groundbreaking battery technology.
This partnership would help Apple cut costs to develop and make vehicles as they would be able to use Hyundai’s electric car platform and facilities.
A former designer at Hyundai, Jeong Yun-woo commented, “Apple outsourcing car production to Hyundai makes sense, because (the Korean firm) is known for quality.” He added, “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 to tech firms.” His context was that of the Taiwanese contract manufacturer’s supply contract with the iPhone maker.
Kevin Yoo, the analyst at eBEST Investment & Securities, said, “Apple could see Hyundai as an ideal partner because when it comes to legacy U.S. automakers, they all have a strong union, which Apple would like to avoid.” He continued to say, “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.”