SEOUL (SOUTH KOREA) – Just a month after it confirmed early-stage talks, Hyundai Motor Co informed on Monday that it is no longer in talks with Apple Inc regarding autonomous electric cars. The news has sent the automaker’s shares skidding.
Hyundai’s stock slid 6.2%, wiping $3 billion off its market value.
Kia shares had jumped 61% after Hyundai initially confirmed a local media report early in January that Apple and Hyundai were in discussions to develop self-driving electric vehicles by 2027 and develop batteries at US factories operated by either Hyundai or Kia. However, after the latest announcement Kia’s shares dropped 15% – a $5.5 billion hit.
“We are receiving requests for cooperation in joint development of autonomous electric vehicles from various companies, but they are at early stage and nothing has been decided,” the automakers said on Monday, in compliance with stock market rules requiring regular updates to investors regarding market rumours.
“We are not having talks with Apple on developing autonomous vehicles.”
The announcement brings a closure to weeks of internal divisions at Hyundai Motor Co Group about the potential tie-up, with some executives raising concerns about becoming a contract manufacturer for the US tech giant in a tie-up similar to the relation electronics firm Foxconn’s maintains in making device for Apple.
Analysts say the talks must have collapsed over leaks of the partnership plan to media, or over possible insistence by Apple that Hyundai’s role in any tie-up would be that of an equipment manufacturer, rather than a strategic partner.
“With numerous news reports over discussions between the two companies, which should have been held to non-disclosure agreements, it would have been uncomfortable” said Kwon Soon-woo, an analyst at SK Securities.
Kevin Yoo, an analyst at eBEST Investment & Securities, said, “It seems clear that Hyundai Motor Group has not been too happy with dealing with Apple … They made it clear that they do not want to be treated just as Apple’s supplier or manufacturer.”