(Bloomberg) — Hyundai Motor Co. said it is in early discussions with Apple Inc. on developing self-driving electric vehicles, emerging as the first potential auto-manufacturing partner for the technology giant. Shares of Hyundai jumped.
“Apple and Hyundai are in discussion, but as it is at early stage, nothing has been decided,” the South Korean manufacturer said in a statement Friday.
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 have told Bloomberg News. That suggests the Cupertino, California-based company, which doesn’t manufacture its own products, is in no hurry to decide on potential auto-industry partners.
Shares of Hyundai rose as much as 24% in Seoul, the biggest intraday gain since 1988, and were up 19% at 11:30 a.m. 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. Apple declined to comment.
An Apple car would rival electric vehicles from Tesla Inc. and offerings from companies such as upstart Lucid Motors and established manufacturers like Daimler AG and Volkswagen AG. 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 with a carmaker because it doesn’t have production capabilities and sales networks to sell its cars,” said Lee Han-Joon, an analyst at KTB Investment & Securities Co. 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 favor of this approach.
Other technology companies expanding to autonomous vehicles have also sought partnerships. Alphabet Inc.’s self-driving unit Waymo has worked with Chrysler, while Amazon.com Inc. has tapped Rivian Automotive Inc. for cooperation over delivery vans.
Hyundai would provide Apple with a partner that’s already accelerating a push into new technologies such as electric, driverless and flying cars, including setting up a $4 billion autonomous-driving joint venture. The venture, with Aptiv, is expected to have a production-ready autonomous driving platform available for robotaxi providers, fleet operators and manufacturers in 2022.
The South Korean company is set to introduce this year its first electric vehicle, Ioniq 5, built on a dedicated platform. The automaker, along with its Kia unit, plans to introduce 23 new EV models and sell 1 million units by 2025.
Next year,…
Read More: Hyundai Is in Early Talks on Apple Tie-Up; Shares Jump