The deal is off.
The Hyundai Motor Group won’t use a Kia factory to produce autonomous electric vehicles for Apple after all, reports Reuters.
Hyundai confirmed on Monday it’s no longer in talks with the American tech giant, and its stock subsequently slid 6.2 per cent.
The drop wiped US$3 billion (A$3.89 billion) off its market value, while Kia stocks fell 15 per cent and the company’s market value took a hit of US$5.5 billion (A$7.13 billion).
“We are not having talks with Apple on developing autonomous vehicles,” the companies reported on Monday.
“We are receiving requests for cooperation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided.”
Hyundai reportedly had concerns about being a mere contract manufacturer for Apple rather than a strategic partner.
The Korean giant has a particularly vertically integrated supply chain and even manufactures its own steel.
“We are agonising over how to do it, whether it is good to do it or not,” a Hyundai executive told Reuters last month on condition of anonymity.
“We are not a company which manufactures cars for others.”
This development follows a tumultuous few weeks, with a report coming out of Korea last month that the deal was going ahead, only to be scrubbed of details.
A subsequent report said Hyundai and Apple were close to signing a deal, and that the vehicle would be fully autonomous and designed for last-mile delivery or robotaxi services.
All the while, Apple remained tight-lipped as usual. The company has been famously secretive about its automotive projects, which have reportedly been on the drawing board for several years.
The Apple-Hyundai car would likely have used Hyundai’s new E-GMP architecture, albeit upgraded to use Apple software.
An earlier report said Apple is developing its own lithium-ion battery technology for vehicles to “radically” reduce battery cost and increase range, which would potentially have been used in the car.
Kia’s West Point, Georgia factory in the US was tipped to be the manufacturing location, with production starting in 2024 but a “beta car” to be revealed next year.
According to sources, Apple wants to build its vehicle in North America with an established automaker so it can control the software and hardware that go into the vehicle.
It first had discussions with Hyundai as early as 2018.
