South Korean automobile manufacturer Hyundai said it is in early discussions with American iPhone maker Apple on developing self-driving electric vehicles (EV).
This makes Hyundai emerge as the first potential auto-manufacturing partner for the technology giant. Shares of Hyundai jumped following the news. “Apple and Hyundai are in discussion, but as it is at an early stage, nothing has been decided,” the South Korean manufacturer said in a statement.
With development work still at an early stage, Apple will take at least half a decade to launch an autonomous, electric vehicle, people with knowledge of the matter said. That suggests Apple, which doesn’t manufacture its own products, is in no hurry to decide on potential auto-industry partners.
An Apple car would rival electric vehicles from Elon Musk’s Tesla and offerings from companies such as upstart Lucid Motors and established manufacturers like Daimler AG and Volkswagen AG. Setting up a car plant can cost billions of dollars and take years, likely the reason why Apple is talking to potential manufacturing partners.
“Apple needs to partner with a carmaker because it doesn’t have production capabilities and sales networks to sell its cars,” said analysts “Building up those capabilities can’t be done quickly so Apple will need a partner for that.”
Bending metal is also a lower-margin business than providing the software, chips and sensors that future cars will rely on. Apple has continued to investigate building its self-driving car system for a third-party car partner rather than its own vehicle, sources have said, and the company could ultimately abandon its own car efforts in favor of this approach.
Other technology companies expanding to autonomous vehicles have also sought partnerships. Alphabet Inc.’s self-driving unit Waymo has worked with Chrysler, while Amazon has tapped Rivian Automotive for cooperation over delivery vans.
Hyundai would provide Apple with a partner that’s already accelerating a push into new technologies such as electric, driverless and flying cars, including setting up a $4 billion autonomous-driving joint venture. The venture, with Aptiv, is expected to have a production-ready autonomous driving platform available for robotaxi providers, fleet operators and manufacturers in 2022.
Hyundai and Apple already work together on CarPlay, Apple’s software for connecting iPhones to vehicles from a variety of automakers.
Hyundai’s EV plans
The South Korean company is set to introduce this year its first electric vehicle, Ioniq 5, built on a dedicated platform. The automaker, along with its Kia unit, plans to introduce 23 new EV models and sell 1 million units by 2025.
Next year, Hyundai also plans to offer models equipped with level 3 autonomous driving technology, which allows drivers to take their hands off the wheel and eyes off the road. It has also invested in Aurora Innovation, a US-based startup formed by a driverless dream team of former chiefs for Google’s self-driving car project and Tesla’s Autopilot.
