Hyundai Motor Co. stepped down from a statement confirming talks were being held with Apple Inc. to develop a self-driving car that added $ 8 billion to the Korean automaker’s market value on Friday. Instead, the company received requests for possible collaboration from a number of companies.
Hyundai revised its statement for the second time within hours, saying it had been contacted by potential partners for the development of autonomous electric vehicles, with all references to Apple was deleted. Hyundai’s shares rose 19% after Korean media initially reported talks with the US company, and reduced their profits only slightly after revising the statement confirming the discussions.
By initially naming Apple is risking the wrath of the tech giant Hyundai, known for its secrecy on new products and partnerships. With development work in its early stages, it will take Apple at least half a decade to bring an autonomous electric vehicle to market, according to Bloomberg News. This suggests the company is in no hurry to select potential auto industry partners.
Hyundai’s Seoul share jump was the largest since 1988. A cable TV unit for Korea Economic Daily first reported on the talks with Apple, saying Hyundai has completed internal discussions on the project and is pending approval from the chairman.
Following the report, Hyundai first issued a statement that it is one of several automakers with which Apple is early on Had made contact. The Korean company then revised that statement less than 30 minutes later, removing the reference to other automakers. A few hours later, another revision was published in which Apple was left out:
« We have received requests from various companies for possible cooperation in the development of autonomous electric vehicles, » says the latest version. « No decisions were made because the discussions are in the early stages. »
The Cupertino, California-based iPhone maker is known to be secret from employees and suppliers. In 2018, it warned workers not to divulge internal information about future plans and aroused the specter of potential legal action and criminal charges. An internal memo said it had « caught 29 leaks » in the past year. In 2012, CEO Tim Cook promised to keep the company’s work under lock and key.
An Apple car would be powered by electric vehicles from Tesla Inc. and offers from companies like Lucid Motors and established manufacturers like Daimler AG and Volkswagen AG can keep up. An automobile plant can cost billions of dollars and take years to set up, which is probably why Apple is talking to potential manufacturing partners. « Apple has to partner with an automaker because it lacks the manufacturing capacity and distribution network to sell its cars « said Lee Han-Joon, an analyst at KTB Investment & Securities Co. in Seoul. “These capabilities can’t be built quickly, so Apple needs a partner to do it.”
Metal bending is also a lower margin business than providing the software, chips and sensors that future cars will rely on . Apple has continued to research whether its self-driving car system could be built for a third-party auto partner rather than its own vehicle, as the known people said, and the company may ultimately abandon its own vehicle efforts in favor of that approach.
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Other tech companies looking to expand into autonomous driving space have also sought partnerships. Alphabet Inc.’s self-driving unit Waymo worked with Chrysler, while Amazon.com Inc. hired Rivian Automotive Inc. to work on delivery trucks.
Many more alliances between automotive and tech companies will emerge, especially after the coronavirus such combinations slowed down in the past year, said Takeshi Miyao, an analyst at Tokyo-based consultancy Carnorama.
Hyundai would provide Apple with a partner who is already accelerating the entry into new technologies such as electric, driverless and flying cars. The automaker will spend more than 60 trillion won ($ 55 billion) in these areas over the next five years, and a $ 4 billion joint venture with a spin-off from General Motors Co. in 2019 establish. The first electric vehicle is expected to hit the market this year.
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