Hyundai U-turns on confirmation of talks with Apple on electric car

Carmaker's shares surge despite revision to statement to omit mention of tech giant

SEOUL • Hyundai Motor backed away from a statement confirming it is in talks with Apple on developing self-driving cars that fuelled an US$8 billion (S$10.6 billion) surge in the Korean carmaker's market value yesterday, saying instead that it received requests for potential cooperation from a number of firms.

Revising its statement for a second time in a matter of hours, the South Korean carmaker said it has been contacted by potential partners for the development of autonomous electric vehicles, removing any reference to Apple.

Shares of Hyundai surged 19 per cent, only slightly paring their gains after the statement confirming discussions was revised.

The stock surge had earlier boosted the combined fortune of Hyundai chairman Euisun Chung and his father Chung Mong-koo by almost US$2 billion, according to the Bloomberg Billionaires Index.

By initially naming Apple, Hyundai risks the ire of the technology giant known for its secretiveness when it comes to new products and partnerships.

With development work still at an early stage, Apple will take at least half a decade to launch an autonomous electric vehicle, people with knowledge of the efforts said. That suggests the company is in no hurry to decide on potential car industry partners.

Hyundai's intraday stock jump in Seoul was the biggest since 1988.

A cable TV unit of Korea Economic Daily earlier reported the discussions with Apple. Hyundai has completed internal talks on the project and is awaiting approval from the chairman, according to the report.

Following the report, Hyundai initially issued a statement saying it is one of various carmakers that Apple has been in early contact with.

It revised its statement less than 30 minutes later, removing the reference to other carmakers. A few hours after that, it issued another revision that omitted Apple.

"We've been receiving requests for potential cooperation from various companies regarding development of autonomous EVs (electric vehicles)," Hyundai said. "No decisions have been made as discussions are in early stage."

Apple declined to comment. It is notoriously secretive with employees and suppliers. In 2018, it warned workers to stop leaking internal information on future plans and raised the spectre of potential legal action and criminal charges.

An Apple car would rival electric vehicles from Tesla and offerings from firms such as upstart Lucid Motors and established manufacturers like Daimler and Volkswagen.

Setting up a car plant can cost billions of dollars and take years, likely the reason why Apple is talking to potential manufacturing partners.

"Apple needs to partner a carmaker because it doesn't have production capabilities and sales networks to sell its cars," said analyst Lee Han-joon of KTB Investment and Securities in Seoul. "Building up those capabilities can't be done quickly so Apple will need a partner for that."

Bending metal is also a lower-margin business than providing the software, chips and sensors that future cars will rely on.

Apple has continued to investigate building its self-driving car system for a third-party car partner rather than its own vehicle, the people familiar have said, and the company could ultimately abandon its own car efforts in favour of this approach.

Other technology companies expanding to autonomous vehicles have also sought partnerships. Alphabet's self-driving unit Waymo has worked with Chrysler, while Amazon.com has tapped Rivian Automotive for cooperation over delivery vans.

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A version of this article appeared in the print edition of The Straits Times on January 09, 2021, with the headline 'Hyundai U-turns on confirmation of talks with Apple on electric car'. Print Edition | Subscribe