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Hyundai, Kia ‘not in talks’ over Apple Car project

Feb. 8, 2021 - 17:19 By Bae Hyunjung


South Korea’s largest carmaker Hyundai Motor and affiliate Kia confirmed Monday that they are “not in talks” with Apple over the manufacturing of the “Apple Car,” denying weeks of speculative reports.

While the crucial dealbreaker yet remains uncertain, market observers suggested that this latest case may deliver some impact on the auto group’s credibility when it comes to confidential global deals.

In their respective regulatory filings, the two automakers of Hyundai Motor Group stated that they are not in talks with Apple to build an autonomous electric vehicle. Though they are considering forming partnerships with foreign companies on the issue, “decisions are yet to be made,” officials said.

This was the first official comment coming from the two carmakers since reports came out regarding the Apple Car project in early January. 

The announcement of South Korea’s second-largest conglomerate in assets came in the wake of Bloomberg’s report over the weekend that Apple had held talks with Hyundai and Kia, but recently stopped the related discussions.

It currently remains unclear whether the discussions will resume at a later point or whether the Hyundai-Apple talks had indeed taken place.

Some optimistic market observers suggested that the two counterparts may still find the possibility for partnership in electric vehicles, minus the self-driving element, citing that the Korean carmaker remains one of few capable of mass production in the United States.

But the predominant view is that the “premature information leak” is likely to have caused Hyundai Motor Group to lose some credibility down the road.

“Given Apple’s confidentiality policy, it is likely that Apple disapproved of Hyundai Motor Group’s stance, perhaps holding it liable for the news leak,” said a think tank official refusing to be named.

“The auto group should bear in mind that this latest controversy may deliver negative impacts to its future talks with global partners.”

While the overheated media reports and the consequent stock buying frenzy were seen as the primary dealbreaker, some pointed out that Apple may simply have chosen another partner either for technical or financial reasons.

Japan’s major newspaper Nikkei reported last week that Apple is in talks with at least six Japanese firms on the Apple Car project. Also counting in US players such as Tesla and General Motors, Hyundai Motor’s partnership with Apple might not have been as plausible or imminent as described in recent news reports, they claimed.

Another speculation is that Hyundai Motor and Kia -- which together form the world’s fifth-largest carmaker by sales -- would have resented its role as a mere original equipment manufacturer for the US tech firm.

As the Korean auto group is gearing up to transform itself from conventional carmaker to a comprehensive future mobility solution provider this year, it is possible that the early-stage talks with Apple might have turned into a tug-of-war for market initiative.

Meanwhile, retail investors are raising fierce complaints over the auto group’s reserved stance in the past month, pointing to what they saw as “lax compliance.”

Further boosting public anger was that high-profile insiders and institutional buyers have already dumped their shares, leaving the falling knife in the hands of retail investors.

According to the Financial Supervisory Service filings in late January, 11 vice presidents and senior vice presidents at Hyundai Motor sold shares worth 602 million won ($538,000) from Jan. 6 to Jan. 18. Jan. 8 was the day the carmaker’s stock price had spiked by nearly 20 percent amid news of the alleged partnership with the US tech giant to make a self-driving electric vehicle by 2023.

The National Pension Service, the country’s largest institutional investor, also has disposed of 920,522 stocks of Hyundai Motor so far this year, lowering the carmaker’s portfolio ratio by 1.18 percentage point. The estimated volume of the sale was around 229.67 billion won as of the closing price on Feb. 5.

“When it comes to top-tier businesses such as Samsung Electronics and Hyundai Motor, investments should be based on tangible information and sustainable value,” said an investment expert who refused to be named.

“Not only did the initial news (on the Apple Car project) first come from unidentified sources, but also Hyundai and Kia have remained ambiguous on the issue for almost a month,” he added, vowing to boycott the automaker group’s stocks in the future.