According to Tencent technology news on February 9, Hyundai Motor said on Monday that it has not held talks with apple on automatic driving electric vehicles. Affected by this, the shares of the company and its subsidiary Kia fell sharply, with a total market value of US $8.5 billion evaporated.
Just a month ago, Hyundai confirmed that it was in early talks with apple, pushing its share price with Kia up. Hyundai’s shares fell 6.2% on Monday, reducing its market value by $3 billion; Kia’s shares, reported by South Korean media as a potential partner of apple, plummeted 15%, losing $5.5 billion in market value.
The statement ended weeks of internal divisions over potential cooperation at Hyundai. Some Hyundai executives have expressed concern about becoming Apple’s OEM, a merger reminiscent of Foxconn’s role in making devices such as iPhones for apple.
“We have received requests from a number of companies to cooperate in the development of autonomous electric vehicles, but they are still at an early stage and have not made any decisions,” Hyundai said on Monday Hyundai’s approach is in line with the rules of the stock market, that is, to regularly update investors on market rumors. “We are not currently negotiating with apple on the development of autonomous vehicles,” Hyundai said
Since Hyundai first confirmed to South Korean media in early January that it was discussing with apple to develop an autonomous electric vehicle by 2027 and develop batteries in Hyundai or Kia’s factories in the United States, Kia’s share price has risen by 61%.
“Apple and Hyundai are in discussions, but because they are at an early stage, no decision has been made,” Hyundai said at the time. However, the company later issued a statement, deleting all references to apple, but said Hyundai received requests for cooperation from unspecified parties.
Just last week, several well-known media reported that the agreement between Hyundai and apple was about to be finalized. A South Korean media even reported that the two companies are scheduled to formally sign a contract on February 17.
Hyundai has always been known for its unwillingness to cooperate with outsiders. As South Korea’s second largest conglomerate, it makes engines, transmissions and even steel assets in a vertically integrated supply chain. According to people familiar with the matter, although the share prices of Kia and Hyundai have soared due to the news of the negotiations, Hyundai’s internal opposition to becoming an apple OEM is quite strong.
“For better or for worse, we’re all agonizing about how to do it,” a Hyundai executive familiar with internal discussions said last month. “We’re not a company that makes cars for others,” the anonymous executive said.
According to another person familiar with the matter, the negotiation between apple and Hyundai on establishing an automobile OEM partnership began in 2018. But progress has been hampered by the South Korean automaker’s reluctance to work with outsiders. Last December, there was news that Apple was promoting autopilot technology, with the goal of producing a passenger car, which first used its breakthrough battery technology in the passenger car as early as 2024.
Breach of confidentiality policy
As we all know, apple is very secretive about its product plans and has never admitted that it has held talks with Hyundai on the manufacture of electric vehicles. There’s no doubt that Hyundai’s announcement on January 8, and subsequent reports that Hyundai will make electric cars for apple, angered apple. Over the years, Apple has been implementing a strict confidentiality policy on its development projects and controlling its relationship with suppliers with ruthless efficiency. It is unclear whether or when negotiations between the two companies will resume.
Market analysts believe that the talks may break down because the cooperation plan is leaked to the media, or apple may insist that Hyundai’s role in any alliance is an equipment manufacturer rather than a strategic partner. “Because Apple may have signed a confidentiality agreement with Hyundai, there is a lot of news about the talks between the two companies, which is disturbing,” said Kwon son woo, an analyst at SK securities Koh Tae Bong, chief researcher at hi Investment & Securities Co., said: “Hyundai may have learned some lessons from this issue. It’s important to keep internal discussions going. ”
“It’s clear that Hyundai is not very happy with the deal with apple,” said Kevin Yoo, an analyst at eBest Investment & securities. They made it clear that they did not want to be seen as a supplier or manufacturer of apple. ”
Hyundai’s chairman, euisun Chung, is at the heart of the company’s transformation from a traditional car manufacturer to flying cars and hydrogen fuel cell vehicles. Because of Monday’s statement, Zheng Yixuan suffered his first very public failure.
There is no doubt that the overthrow of the company’s statement in January this year has disgraced Zheng Yixuan, who has just become chairman of Hyundai Motor. If the talks with apple don’t restart, it’s a bit disappointing, because only a few car manufacturers around the world have the capacity to produce cars on a large scale.
During his four months in charge of Hyundai Motor and his tenure as vice chairman, Zheng Yixuan demonstrated his trading ability and set Hyundai on a cleaner and more environmentally friendly future. Hyundai also announced an alliance with Uber and Aptiv before planning to launch the fastest car and autopilot in 2028. Hyundai’s hydrogen fuel cell truck has been tested in Switzerland.
Mr. Zheng also sought to boost Hyundai’s profitability, add more SUVs to its product line and inject money into the automaker’s electric car ambitions. Hyundai will begin selling IONIQ 5 in Europe next month, the first electric car it has assembled on a dedicated electric vehicle platform.
In December last year, Hyundai reached a deal to buy an 80% stake in Boston Dynamics. The deal valued the mobile robot company at $1.1 billion. Hyundai is exploring the practical use of industrial robots with the goal of one day developing them into complex services, such as hospital patient care.
Since becoming Chairman of Hyundai Motor, Zheng Yixuan has been working hard to improve the company’s culture, communicate with employees more frequently, and encourage employees to leave their suits and ties at home and wear more casual clothes. In South Korea’s big companies, where social etiquette is very important, this practice was once unimaginable.
Kim Jin woo, an analyst at Korea Investment & Securities Co., said that while Apple’s experience is a profound lesson, it could be a good thing for Zheng Yixuan and Hyundai to refocus on their ambitions. “Hyundai has more than 40 years of experience in managing the supply chain. Apple’s news may be a catalyst for the stock price, but Hyundai has been developing its own projects for future travel. ” (compiled by Tencent technology / Wuji)