Talks on Apple Car Suspended
Hyundai Motor Co., Kia Corp., and Hyundai Mobis announced on Feb. 8 that they were not in talks with Apple about developing autonomous vehicles.
A month ago, Hyundai Motor and Kia said they were receiving proposals from many companies to cooperate in joint development of autonomous electric vehicles. They did not deny their discussions with Apple at the time. But this time, they denied news reports that they were in talks with Apple.
Various interpretations were made over the disclosure of Hyundai Motor and Kia Corp. Some analysts said the disclosure implies a temporary suspension of the discussion, not its total breakdown. Others said that Hyundai Motor and Kia Corp. are still in talks with Apple about electric vehicles because they mentioned autonomous vehicles only in the disclosure. Hyundai Motor and Kia did not elaborate further, saying that the disclosure was all they could say.
Many analysts believe that the discussion has been suspended because Apple's secrecy policy has been undermined. Apple is notorious for demanding secrecy when making business deals with other companies. Apple reportedly asked Hyundai Motor and Kia not to disclose the fact that Apple proposed a partnership with them in January. However, rumors of cooperation with Apple spread as Hyundai Motor and Kia said in a disclosure that many companies were approaching them for collaboration. On top of that, foreign media outlets reported that contract signing was imminent between Apple and Hyundai Motor and Kia Corp.
Some say that the discussions on cooperation hit a snag because the interests of the two sides differed. Skepticism about collaboration reportedly arose among Hyundai Motor executives because Hyundai Motor may become a simple subcontractor for Apple. In the same context, Apple might have been reluctant to share autonomous driving technology with Hyundai or Kia as the two companies are developing their own self-driving technologies.
Some industry insiders predict that the discussion between the two sides will resume. Self-driving car technology which Hyundai Motor and Kia Corp. said they did not discuss in their public announcements is already under development through joint venture Motional which Hyundai Motor founded with Aviv in 2020, so Hyundai Motor and Kia Corp. do not need to cooperate with Apple in the self-driving car technology sector. This means that there is still a possibility of collaboration over an electric vehicle platform. "Hyundai Motor’s and Kia Corp.'s announcement on the day might be a strategy to keep Apple's secrecy while quelling controversy over collaboration," an industry official said. "We cannot rule out the possibility of continuing negotiations under the table."
Stock prices of Hyundai Motor Group's five affiliates fell altogether on the news of the suspension of the much anticipated discussion about the Apple car on the day, slashing their market capitalizations by more than 13 trillion won. The stock price of Kia Corp. fell nearly 15 percent, that of Hyundai Motor six percent and that of Hyundai Mobis eight percent.