By
Godfrey Benjamin
March 22nd, 2024
It now remains unclear what company Apple will seek as its next partner on the Apple Car.
Hyundai stock has plummeted after confirming the company is not in talks with Apple Inc (NASDAQ: AAPL) on the production of a self-driving car. Recent reports had suggested that a deal between the two companies was imminent which initially sent Kia stocks soaring.
There has been drama between Apple and Hyundai that has ultimately led to a falling out. For the most part, it seems that Hyundai is at fault and can’t seem to make up its mind overworking with Apple.
Hyundai, through its subsidiary Kia Motors last month began with a confirmation that it was working with Apple on a self-driving car- Apple Car, with production likely by 2027. This, with a $3.6B potential investment from Hyundai, further the auto giant would produce batteries in the US in either Hyundai or Kia factories. The deal was looking imminent and extremely bullish. In fact, upon confirmation, KIA shares soared by 61%.
But the decision for Hyundai to partner with another company was uncharacteristic. Hyundai is notorious for its preference to work alone. The company even prefers to produce in-house engines, steel, and transmissions.
Hyundai now is confirming that talks with Apple have collapsed. Some reports suggest that the negotiations broke down following Hyundai’s comments that it was receiving partnership deals from different companies and was yet to make a final decision:
“We are not having talks with Apple on developing autonomous vehicles.”
Others have rather argued that the partnership must have been held to non-disclosure agreements, which Hyundai broke when it confirmed the deal. This would have provoked Apple, led to Hyundai distancing itself and ultimately leading to a fallout.
A Hyundai executive close to the matter also made some remarks that made it more than evident that Hyundai was also unhappy about the collaboration:
“We are not a company which manufactures cars for others.”
Now Hyundai has made it clear it is in talks with multiple companies on autonomous cars but no decision has been made. This news of the falling out has since seen Hyundai shares fall 8% while KIA has slumped 3%.
Throughout the whole matter, Apple has abstained from making any comments regarding the deal. This is no surprise as it has been in its culture to keep developments under wraps. Only after deals have completely been furnished has Apple made statements. With Apple Car, more of the same is to be expected.
It now remains unclear what company Apple will seek as its next partner on the Apple Car. Apple has been keen on getting into the automobile industry, and after a five-year rumor, last year Apple confirmed it was going ahead with the plan. However, due to its lack of skin in the game and more importantly a lack of production facilities, it is looking to partner with an already established car maker. With an initial plan of production by 2024, the tech giant will need to seek one soon and hope that the new partners last for more than a month.