Hyundai and Kia confirmed its talks on the ‘Apple Car’ were off Monday.
A month after the South Korean automaker confirmed it was in talks with Apple to build the tech giant’s first autonomous vehicle, Hyundai confirmed Monday that those talks were off. “We are not having talks with Apple on developing autonomous vehicles,” the company made clear in a statement published to Reuters.
That news sent share prices tumbling for both Hyundai and Kia. The former lost $3 billion in value after its shares slid 6.2%, while the latter tumbled 15%, or $5.5 billion. Internal division among executives within Hyundai Motor Company Group evidently led to the decision. In the past few weeks, some voiced concerns about the company playing second fiddle to Apple as a parts supplier or full-blown manufacturer for its Apple car. There is some evidence to reinforce those concerns, as Taiwanese company Foxconn is a major manufacturer of Apple’s products.
For its part, Hyundai is more than just an automaker — it’s a huge conglomerate that sources most of its components in-house. “We are agonizing over how to do it, whether it is good to do it or not,” a Hyundai representative told Reuters last month. “We are not a company which manufactures cars for others,” that person anonymously told the outlet.
While talks are apparently off with Apple, Hyundai and Kia did say other companies made similar proposals. “We are receiving requests for cooperation in joint development of autonomous vehicles from various companies, but they are at early stage and nothing has been decided.” It’s unclear then, based on this news, whether other talks will hit the same roadblocks. Per stock market rules, both companies made the announcement to update their investors about the earlier rumors.
Who will build the Apple Car?
If Hyundai and Kia are out of the running, who will build the ‘Apple Car’ then? We’ll have to wait and see whether another automaker will take up the Cupertino giant’s deal. Or, if that doesn’t happen, Apple may work with other suppliers to build an autonomous vehicle.