After a report surfaced that Hyundai Motor Co. and Apple were discussing the possibility of jointly developing self-driving electric vehicles, the automaker’s share soared 23% in Seoul, CNBC and Bloomberg report.
Why It Matters: Apple’s auto-ambitions, titled “Project Titan,” have been no secret for several years, but “nothing concrete has [ever] materialized.” A tie-up with Hyundai could arguably validate the tech giant’s aspirations.
- The report said the two companies could partner on electric vehicle production and battery development, and that a car may be released in 2027.
- Internal discussion was reportedly complete at Hyundai and is awaiting the approval of the chairman.
Apple declined to comment on the news, while Hyundai released this statement:
- “We’ve been receiving requests of potential cooperation from diverse companies regarding development of autonomous driving EVs, but no decisions have been made as discussions are in early stage.”
Patiently Waiting: Still, we’re years away from Apple coming to market with any sort of vehicle.
- Reuters last month reported the company is targeting 2024 to produce a passenger vehicle that could include “its own breakthrough battery technology.”
- Shares of companies that build parts for autonomous cars soared on last month’s news. But Apple analyst Ming-Chi Kuo said the rally was driven “purely on speculation.
- Kuo indicated that he expected an Apple vehicle to take until 2028 or later to launch.
A Potential Tesla Challenger: Daniel Ives and Strecker Backe, two analysts from Wedbush Securities, told CNBC: “they would assign a 35%-40% chance of Apple launching its own standalone car due to the ‘Herculean-like auto production capabilities, battery technology ramp, financial model implications, and regulatory hurdles involved in such a game changing initiative.’”
I believe that, just like its other products, Apple Car will be late to the game. But usually for consumer electronics, despite being late, Apple brings a premium, elevated product to market.
No shade to Hyundai, but I’m curious to see what an Apple + Hyundai car product would look like because Hyundai cars don’t strike me as the premium analog in the automotive industry to Apple’s iPhones in the smartphone industry.
And how does this compare against Tesla, who is already the “Apple” for cars?
For now, a potential Apple Car presents a lot of questions and very little insight to increasing $AAPL’s price target.