One ‘Shell’ Of An Issue Threatens Apple-Hyundai Partnership On Autonomous EV Project (a.k.a., ‘Apple Car’)
COMMENTARY: 02.03.21 – They say that some matches are made in heaven but one such relationship appears to be headed towards… hell (and, not even Saint Valentine nor Cupid can help salvage it).
Other than the news regarding the company’s upcoming VR headset which broke late in January, one of the biggest stories to break so far in 2021 revolving around Apple, Inc. was a report earlier in the year from Car and Driver magazine about an Apple-Hyundai partnership — specifically, with regard to Apple’s autonomous EV project (a.k.a., the “Apple Car”) — and in the days and weeks that followed, it was the hottest topic surrounding the Cupertino, California-based company (it still is). Throwing a monkey wrench into the project’s engines, namely, the collaboration between the two companies, was a report last week by Reuters from the opposite end of the spectrum focused on the Hyundai Motors angle which made public private musings of some execs at the Seoul, South Korea-based company and their doubts over the deal: a new development that, essentially, threatens to put the brakes on the prospects of an Apple-branded automobile hitting the road anytime soon (beep beep!).
And, just when the wheels of Apple’s autonomous EV project started to roll along again and the “Apple Car” was becoming a reality!
An Odd Couple
When you think of Apple and Hyundai forming a partnership — an innovator in tech gadgets and an automobile manufacturer — the two aren’t exactly a pair of peas in a pod. On one hand you have a titan in their business category and on the other, while they’re a major player, isn’t exactly a titan in theirs (see the reference I made there: if not, maybe this newly granted Apple patent for a “vehicle visibility system” will help make things… clearer?). If anything? The two companies are more like… an odd couple.
Take, for instance, the headline of the story in reference from Reuters. It says it all: “Hyundai wrestles with the risks of embracing Apple.”
But what is Hyundai up in arms over and fearful of embracing? It’s not like it and Apple are literally tying the knot, right? Well, that’s the thing. The two companies appear to be all tied up over pre-nuptials at this stage of the relationship and have been wrestling with specific details surrounding an agreement. At its core (or, should I say… the heart of the matter)?
According to the report from Reuters, the Seoul, South Korea-based company’s top executives have been divided over a potential tie up, with some raising concerns about and others yet expressing considerable opposition to becoming a contract manufacturer for Apple (e.g., the Apple-Foxconn partnership with regard to the iPhone). People close to the discussions revealed that one of the options on the table for consideration included Hyundai acting as the exclusive manufacturer for an Apple-branded automobile, however, the cars would be sold under the Cupertino, California-based company’s more ubiquitous brand rather than under Hyundai Motors. Another person familiar with the matter said Apple would prefer that it be able to design and source its own car parts from third party sources — from frames and bodies, to drive trains and other major components — with Hyundai, or its subsidiary, Kia, solely serving as the final assembly site for the “Apple Car” (note that that’s what Apple’s autonomous EV project has been dubbed as by the news media and is not necessarily what the vehicle will be called in the end).
“We are not a company which manufactures cars for others. A cooperation may initially help raise the brand image of Hyundai or Kia. But in the mid- or longer-term, we will just provide shells for the cars, and Apple would do the brains,” said a Hyundai executive with knowledge of internal discussions involving the Apple-Hyundai partnership.
This tie up presents a bit of a problem (a bump in the road, if you will) for the Cupertino, California-based company’s aspirations for an autonomous automobile and, not to mention, threatens to break up the Apple-Hyundai partnership in whatever stage of talks the two companies are at. With that said, however, as noted by Reuters in its report, as far as partnering up together on an “Apple Car” is concerned, Apple has never officially acknowledged having had any discussions with Hyundai to begin with. Additionally, Hyundai — since spilling the beans on the deal — has not given any updates either on any further talks with Apple nor has it indicated whether they still remain active (at this point in the relationship, there doesn’t seem to be any love lost among this odd couple).
Shifting Gears
Shifting gears for a moment (so, buckle up), with regard to the Apple-Hyundai partnership, the latest scuttlebutt is a rumor which surfaced just this week — as reported by Macworld magazine (via a report originally from MacRumors) — from well known Apple analyst, Ming-Chi Kuo, who wrote in a recent research note that the Cupertino, California-based company is currently collaborating with several automobile manufacturers on Apple’s autonomous EV project, including GM (General Motors) and… Hyundai. Specifically, Kuo hinted that Apple will be using Hyundai Motors E-GMP battery and EV platform as the foundation for an Apple-branded automobile. The Apple analyst also noted that aside from focusing on self-driving hardware and software, semiconductors, and battery-related technologies? The “Apple Car” will focus on an innovative user experience, form factor, and internal space designs: all while leveraging the resources of current automakers and tightly integrating them into Apple’s existing ecosystem.
As further proof of the deal between the two companies, the magazine cited a report from late last month by the Korean publication, eDaily, whose story revealed details about the location where the “Apple Car” will be produced… an automobile manufacturing plant based in the U.S. located in Georgia belonging to Hyundai subsidiary, Kia.
In addition, citing another report from earlier in the year by the Korea Economic Daily, Macworld also reported that one of the reasons for the Apple-Hyundai partnership was to offset the high costs associated with building the battery-powered electric engine for an Apple-branded automobile. Corroborating that story was the report from Car and Driver which indicated back in January that Apple is counting on Hyundai to build — and develop the batteries that will go into — the “Apple Car” in the final stages of production.
As far as a release date is concerned? While the magazine made reference to a rumor from early December of last year which suggested that the Apple-branded automobile could roll out later this year, Macworld, citing a report from Bloomberg that indicated it was still half a decade away, reported that the Apple Car” is still many years out from completion. Kuo, the Apple analyst, expects the time frame to be 2025 at the earliest, with it possibly delayed until 2027. Corroborating the latter is Car and Driver which previously reported back in January that the Cupertino, California-based company’s electric vehicle (EV) is said to be slated for launch in 2027.
Looking into the rearview mirror at the team up between Apple and Hyundai, interestingly enough, Reuters noted in its report last month — based on previously undisclosed details provided by a source with knowledge of the deal — that the two companies first held talks over a potential partnership on an electric vehicle beginning back in 2018. At the time, Apple’s automobile ambitions were still classified and internally known within the company as: “Project Titan” (the codename for Apple’s autonomous EV project at its inception).
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