Collaboration for ‘Apple Car’
Those in the automotive industry have become restless as the possibility of collaboration between Hyundai Motor Group and Apple has surfaced. This is because many of them expect or are concerned that the two companies will quickly become overwhelming powerhouses in the electric vehicle market.
On Jan. 9, a local media outlet reported that their collaboration plan was waiting for only the approval of Chung Eui-sun, chairman of the Hyundai Motor Company. In response, Hyundai Motor announced, "We are receiving requests for joint development of self-driving electric vehicles from a number of companies but we have not made any decision about them yet," a Hyundai Motor official said. "We will disclosure the matter on confirming or within one month from the confirmation."
It is not known whether the method of collaboration is a joint venture or a technological alliance. Hyundai Motor did not deny receiving the collaboration proposal from Apple, but it seemed very cautious as Apple holds the key.
"We are in the process of discussing with Apple, but we are in the early stages," the official said. Hyundai Motor has virtually acknowledged Apple's proposal for collaboration but appears prudent, saying that the company is only considering the proposal. This is because Apple is known to be sounding out collaboration opportunities with several global automobile manufacturers with the goal of producing self-driving electric vehicles (‘Apple Car’) starting from 2024.
Insiders of the automotive industry believe that Apple's proposal for collaboration was an inevitable choice. This is because it is impossible for Apple to launch an electric vehicle model that can run its own in 2027 after introducing the Apple Car in 2024 without the help of carmakers. It took 10 years for even Tesla, the number one leader in the electric vehicle industry, to start making commercially usable cars.
Industry insiders and securities companies analyze that there is a high possibility of collaboration between the two companies. Apple has secured related technologies while conducting research for the development of the Apple Car since 2014, sources say. However, Apple does not have the ability to produce cars. Hyundai Motor has the world's fifth-largest automobile production base, and has recently focused on electric vehicle platforms. It ranks fourth in the global electric vehicle market share standings. In particular, it enjoys an unrivaled position in the hydrogen vehicle sector with a market share of 70 percent. In addition, Korea is home to three leading global battery companies that have established strong partnerships with Hyundai Motor. This fact is a big point that Apple pays much attention to.
Collaboration with Apple is also expected to be a positive factor for Hyundai Motor. This is because Apple's brand power is so strong and cars are evolving to the extent that they are now called “mobile phones on wheels.” During collaboration with Apple, Hyundai Motor will be able to secure Apple's mobile phone operating system and contents. "Hyundai Motor can also strengthen connectivity services that link mobile phones and cars based on big data owned by Apple," said an official from the stock market. "Hyundai Motor will have nothing to lose in collaboration with Apple."
Meanwhile, Apple was expected to spend at least five years before the launch of the self-driving electric vehicle Apple Car as the number of Apple engineers in charge of developing the Apple Car’s driving systems and designing internal and external bodies was still small, Bloomberg News reported. Although Apple is shifting its product development into high gear by recruiting those who worked as Tesla executives and engineers, Apple may give up making efforts to manufacture cars as it has been considering supplying autonomous driving systems to third-party partners that are automakers.
Such expectations pushed up Hyundai Motor’s stock price to 246,000 won, up 19.42 percent on Jan. 9 from the previous trading day. However, some analysts say it is premature to mention synergy effects as Hyundai Motor’s collaboration with Apple has yet to materialize and the possibility of their partnership is in the dark.