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Summary
- Hyundai and Kia have said they are not developing self-driving electric vehicles in partnership with Apple.
- Earlier reports had suggested that Apple planned to develop autonomous EVs in collaboration with Hyundai and Kia to be launched in 2024.
- Shares of Hyundai, Kia and Apple fell by 5.61, 14.98 and 0.31 per cent, respectively, on 8 February following the announcements.
Korean automotive manufacturers Hyundai Motor Company (KRX: 005380) and Kia Motors (KRX: 000270) denied reports of partnership negotiations with technology giant Apple (NASDAQ:AAPL) to develop self-driving electric vehicles, in separate regulatory filing disclosures made by both carmakers today.
According to the filings, while the automotive companies had received autonomous EV development collaboration requests from several other companies, it was still in an early exploratory stage with nothing conclusive.
Given the company’s preference for handling things in a more secretive manner, the leaked news of a potential collaboration with the automakers may have led to the talks suddenly being halted, a media report suggested. It further added resumption of talks were unclear at present.
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Apple’s iCars in 2024
The news comes days after reports surfaced that the technology giant is planning to invest US $3.6 billion in Hyundai’s affiliate, Kia Motors, to make self-driving EVs in Georgia. Hyundai owns a 38 per cent stake in South Korea’s second-largest automotive manufacturer Kia Motors.
Earlier reports had suggested the tech major would launch its electric cars by 2024 and had set a production target of 100,000 vehicles for its initial launch. The potential collaboration led the Korean carmakers’ stock to touch new highs with investors expecting the move to rejuvenate stagnant car sales.
Speculation has long trailed the software giant for several years as the company has sought to partner with carmakers to develop the iCar. The company is still in the early stages of development for a battery-operated self-driving vehicle and is even shopping around for potential manufacturing partners.
Competition heats up
Apple’s entry into the EV sector will further heat up the competition. The software company will face competition from Elon Musk-owned electric car company Tesla (NASDAQ:TSLA), US-based privately owned EV maker Lucid Motors, European automaker Daimler AG (ETR: DAI) and Volkswagen AG (ETR: VOW3), US-based legacy car manufacturers General Motors (NYSE:GM), Ford (NYSE:F), and others. Last week, Ford announced its plans to double its investment into EVs to US $11 billion up to 2025, while Volkswagen pledged an outlay of US $37 billion into the segment.
The International Energy Agency suggested that EVs comprised of about 3 per cent of global auto sales in 2020. EV sales rose by 43 per cent owing to falling battery prices and is poised for mass adoption.
Shares witness sharp fall
Shares fell by 5.61 per cent to KRW 2,36,000 for Hyundai Motors and 14.98 per cent to KRW 86,300 for Kia Motors, respectively around 3.12 PM GMT on 8 February, signalling investor disappointment following the news. Meanwhile, Apple’s stock prices were at US $136.76, down by 0.31 per cent in after-hours trading during the same period.