After South Korea’s Hyundai Motor Co said it was in early talks with Apple, after reports of a possible electric car and battery tie-up, Hyundai shares have surged 25 per cent (by over $9 billion) on excitement over South Korea’s biggest car company working with the world’s most valuable company.
Reuters had earlier reported that Apple planned to move forward with self-driving car technology, with aims of producing a passenger vehicle with a “breakthrough” battery technology by 2024. According to Korea Economic Daily TV, Apple and Hyundai are working on developing a self-driving electric vehicle by 2027, with batteries to be developed at US factories operated by either Hyundai or its affiliate Kia Motors Corp.
Hyundai’s statement was brief and offered few details. “Apple and Hyundai are in discussions but they are at an early stage and nothing has been decided,” the company said.
Hyundai Group Chairman Euisun Chung and his father, Mong-Koo, saw their combined fortune grow by almost $2 billion according to the Bloomberg Billionaires Index.
The potential in the electric car market is clear for all: The over 700 per cent rise in share value of Tesla Motors pushed CEO Elon Musk to the number one spot as the world’s richest person (in terms of net worth). Apple, as the world’s highest-valued company—with a net worth of around $2 trillion—has built up many of the capacities that would make it a powerful player in the segment, including a history of seamless hardware and software integration, revolutionary new processors, and of course, software expertise. What it lacks, however, is experience building cars—something Hyundai would be able to bring to the table.
Major investors have already taken note of the speculation. In a web call with investors, Morgan Stanley lead analyst Katy Huberty was bullish of Apple’s prospects, noting that it only needed a 2 per cent share of the global $10 trillion mobility market to surpass its $500 billion iPhone business (which accounts for a third of the smartphone market).
Hyundai has plans to spend over $55 billion in electric and driverless technologies over the next five years and has already set up a $4 billion autonomous driving joint venture with General Motors Co spinoff Aptiv.
Not just Apple, but Google too has invested in self-driving cars. Waymo LLC, a subsidiary of Alphabet Inc, emerged from Google’s self-driving car programme and has partnerships with numerous carmakers including Daimler AG, Nissan-Renault, Fiat Chrysler, Jaguar Land Rover and Volvo.
