Hyundai Still Contemplating Deal With Apple for Autonomous Electric Cars

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Executives in Hyundai Motor are divided over a possible tie-up with Apple, with some elevating considerations about changing into a contract producer for the US tech large, dimming the outlook for a deal.

Hyundai stated earlier this month it was in preliminary talks with Apple, however gave no particulars. Local media stated the companies have been discussing an electrical automotive and battery tie-up.

Hyundai declined to remark for this story. Apple declined to remark.

Apple has by no means acknowledged talks with the automaker about constructing automobiles, and it was unclear whether or not any such talks are nonetheless energetic. The iPhone maker sometimes insists on strict secrecy from its potential companions and suppliers about future plans or unreleased merchandise.

In an earnings name on Tuesday during which it reported its finest quarterly revenue in over three years, Hyundai didn’t give any updates on talks with Apple or point out whether or not they stay energetic.

“We are agonising over how to do it, whether it is good to do it or not,” stated a Hyundai govt conscious of the inner discussions on the tie-up with Apple. “We are not a company which manufactures cars for others. It is not like working with Apple would always produce great results.”

Few particulars are recognized in regards to the talks between the 2 firms. But individuals near the discussions say the choices thought of included Hyundai or Kia performing as a producer for automobiles designed by Apple and bought beneath its highly effective, ubiquitous model.

Hyundai is historically recognized for its reluctance to work with outsiders, making engines, transmissions and even its personal metal in-house beneath its vertically built-in provide chain as South Korea’s second-largest conglomerate. Although shares in Kia and Hyundai have surged due to the talks, there’s appreciable opposition to changing into an Apple contract producer, which might maintain up any cope with the American large, these individuals stated.

Apple and Hyundai first began talks over a automotive partnership in 2018, when Apple’s effort, generally known as Project Titan, was headed by Alexander Hitzinger, who’s now a Volkswagen govt, stated an individual conversant in the matter. But progress was hampered by the South Korean automaker’s reluctance to work with outsiders, the particular person stated.

These talks haven’t been beforehand reported.

“It is really difficult (for Hyundai) to open up,” this particular person stated, including that the South Korean firm would more likely to have to interchange some executives to keep away from a tradition conflict beneath any partnership with Apple.

“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,” the particular person stated.

The South Korean automotive producer, nonetheless, has extra capability. Contract manufacturing would assist it safe manufacturing quantity.

Not like foxconn

Another particular person conversant in the matter stated Apple would like to supply main elements of its personal design – frames, our bodies, drive trains, and different components – from quite a lot of locations and depend on Hyundai or Kia for a remaining meeting website.

“They would want this to be in the United States,” the second particular person stated.

While the talks are at an early stage, Hyundai Motor Group has “tentatively decided” that it could need Kia to companion with Apple, not Hyundai Motor, a Hyundai insider stated.

“The Group is concerned that the Hyundai brand would become just Apple’s contract manufacturer, which would not help Hyundai in its effort to build a more premium image with its Genesis brand,” the insider stated. Kia can also be shifting sooner by way of electrical vehicles, and it has out there manufacturing capability at its Georgia manufacturing unit within the United States.

Another govt at Hyundai stated: “Tech firms like Google and Apple want us to be like (contract phone maker) Foxconn.

“A cooperation could initially assist elevate the model picture of Hyundai or Kia. But within the mid- or longer-term, we’ll simply present shells for the vehicles, and Apple would do the brains.”

Nevertheless, there are broad areas where the two companies could benefit, including access to Hyundai’s electric car platform and its suppliers, such as battery makers, as well as access to Apple’s autonomous vehicle stack and software, said Park Chul-wan, a South Korean battery expert and a professor at Seojeong University.

“Hyundai could be greater than only a Foxconn,” he said.

© Thomson Reuters 2021


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